BorgWarner Announces Plans to Spin Off its Fuel Systems & Aftermarket Segments
<p><a href='https://financialmodelingprep.com/financial-summary/BWA'>BorgWarner Inc. (NYSE:BWA)</a> announced its plan to spin off its Fuel Systems and Aftermarket segments into a standalone, publicly traded company. </p>
<p>Analysts at Deutsche Bank provided their views on the announcement, stating they have mixed feelings about it. On the positive side, a divestiture makes strategic sense, allowing the remaining company to focus completely on growing and accelerating its EV opportunities, while the newly formed company could maximize its ICE-related free cash flow. </p>
<p>The remaining company’s revenue exposure to EV will become best-in-class, its growth above market profile should be higher, and if it can demonstrate margin improvement over time, this should warrant solid valuation multiple expansion for the BWA stock. </p>
<p>At the same time, the analysts mentioned they worry this could be dampened by the low market valuation of the stand-alone company, presumably in the context of a lack of strategic buyer interest for the assets, and since the stocks of previous ICE spinoffs have traded at low multiples.</p>

NYSE:BWA