Is BorgWarner, Inc. overvalued or undervalued?

As of 7 November 2025, the valuation grade for BorgWarner, Inc. has moved from fair to very expensive, indicating that the stock is overvalued. The company exhibits a P/E ratio of 8, a price-to-book value of 1.49, and an EV to EBITDA ratio of 5.44, which are relatively low compared to its peers such as CNH Industrial NV with a P/E of 19.42 and AGCO Corp. at 14.36, suggesting that BorgWarner may not be as attractive as its competitors despite its low valuation ratios.
In terms of performance, BorgWarner has shown strong returns, with a year-to-date return of 41.33%, significantly outperforming the S&P 500's 14.40% during the same period. However, the long-term returns reveal a concerning trend, with a 3-year return of 33.51% compared to the S&P 500's 76.76%, indicating that while the stock may have short-term gains, it has underperformed against the benchmark over a longer horizon. Overall, BorgWarner appears to be overvalued given its current valuation metrics and relative performance against peers and the market.