Is BorgWarner, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for BorgWarner, Inc. has moved from fair to very expensive, indicating that the company is overvalued. Key ratios include a P/E ratio of 8, an EV to EBITDA of 5.44, and a PEG ratio of 0.22, which suggest that while the company may appear inexpensive on a price-to-earnings basis, the overall valuation metrics indicate a premium compared to its peers. For instance, CNH Industrial NV has a P/E of 19.42, while AGCO Corp. shows a P/E of 14.36, both of which highlight BorgWarner's relative overvaluation.
In terms of recent performance, BorgWarner has outperformed the S&P 500 over the year with a return of 22.00% compared to the index's 14.08%. However, over longer periods, such as the 3-year and 5-year returns, BorgWarner significantly lags behind the S&P 500, with returns of 43.25% and 25.15%, respectively, versus 81.19% and 91.29% for the index. This discrepancy reinforces the notion that BorgWarner may be overvalued given its performance relative to broader market trends.