'ICE Is Nice' Thesis: Why BorgWarner Is Well Positioned For 2023, Analyst Says

Over the past three months, the average analyst price target for BorgWarner Inc. BWA has risen by 1%.

Unit volume and profitability of businesses with exposure to internal combustion engines (ICE) may improve heading into fiscal 2023, according to Morgan Stanley.

The Analyst: Adam Jonas upgraded the rating for BorgWarner from Underweight to Equal-Weight, while raising the price target from $35 to $45.

The Thesis: The company has a portfolio of ICE and hybrid catered products, which are well positioned for the "ICE is Nice" thesis, Jonas said in the upgrade note.

Check out other analyst stock ratings.

“In our view, the ICE/hybrid portfolio has a higher technological moat while also having a longer tail than the investment community might appreciate,” he said.

“We expect to see OEM customers dial-back the pace of EV investments into a less certain environment, increasing the percent of ICE revenue in BWA's mix,” Jonas stated. “While car companies may not issue big press releases for selling high-margin ICE products… that's exactly what we believe will support the results of players like BWA into FY23."

BWA Price Action: Shares of BorgWarner had declined by 0.47% to $42.04 at the time of writing Monday.