Jefferies Raises Price Target on BorgWarner (BWA) as Margins Continue to Grow

Jefferies is maintaining its Hold rating on shares of BorgWarner (NYSE: BWA) while raising its price target from $77 to $86.

The company released its Q3 results ahead of expectations with EPS of $1.15, topping the consensus of $1.04. EBITDA rose 44 percent to year over year to $269 percent as operating margins totaled 11.1 percent, beating the firm's estimate of 10.7 percent.

To reflect higher demand for its products, tighter cost controls, and a stable business outlook, management raising its FY11 EPS guidance from $4.25-$4.45 to $4.35-$4.45.

An analyst at Jefferies comments, "BWA reported a clean 3Q beat with solid trends throughout the company. We are gaining confidence that the company can continue to grow margins despite being above past-peak."

The firm raised its FY11 and FY12 EPS estimates from $4.48 and $5.39 to $4.53 and $5.70. Jefferies also tweaked its revenue estimates for the two years to $7.27 billion and $8.49 billion.

For more ratings news on BorgWarner click here and for the rating history of BorgWarner click here.

Shares of BorgWarner closed at $76.33 yesterday.

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