Higher Backlog Leads to 4-7% EPS Upgrades for Borg Warner Inc.

J.P. Morgan published its research Report on Borg Warner Inc. BWAtoday in which they upgrade EPS and the price target due to higher backlog. BWA announced yesterday that their 2011-2013 backlog is $2.3B, an 18% increase from the backlog stated last year for 2010-2012. Also, BWA's new backlog cadence was $750MM in 2011 and 2012 which was higher than prior guidance of $600MM and $630MM. J.P Morgan writes, "Driven by higher than earlier modeled backlog in 2011 and 2012, we raise our 2011e EPS by $0.15 to $4.05 and 2012e EPS by $0.30 to $4.80. Consistent with our upward estimate revision, we also raise our Dec-2011 price target to $67 which we continue to base on an unchanged 14x multiple now applied to our revised 2012e EPS of $4.80 (vs. $4.50 earlier)." BWA closed Tuesday at $57.71.