12 Best Consumer Discretionary Stocks to Buy According to Analysts

9. BorgWarner Inc. (NYSE:BWA)

Upside Potential: 39%

Number of Hedge Fund Holders: 27

BorgWarner Inc. (NYSE:BWA) provides clean and efficient technology solutions for combustion, hybrid, and electric vehicles. The company’s products enhance vehicle performance, propulsion efficiency, stability, and air quality. It manufactures and sells these products globally, primarily to original equipment manufacturers (OEMs) of light vehicles, including passenger cars, sport-utility vehicles, vans, and light trucks.

BorgWarner Inc. (NYSE:BWA)’s strategy focuses on expanding its product portfolio through organic investments and technology-focused acquisitions. The company’s balanced portfolio is particularly crucial as the automotive industry experiences volatility in electric vehicle adoption across different regions. It reported steady Q4 2024 results, although they were slightly below street expectations. Q4 sales declined by 2.4% to $3.4 billion, but the adjusted operating margin was 10.2%, which was at the upper end of its guidance. For FY 2025, the company forecasted net sales to be between $13.4 billion and $14.0 billion, indicating an expected decline in sales next year. However, it anticipates maintaining an operating margin similar to 2024. Overall, the performance remained healthy given the lackluster market conditions.

Most analysts on the street, including Wells Fargo, JP Morgan, and Evercore ISI, have maintained their Buy rating on BorgWarner Inc. (NYSE:BWA) in their recent updates. On February 11, Barclays analyst also reiterated his Buy rating but marginally lowered the price target to $42 from $43. He believes the company’s guidance for 2025 was a necessary reset of expectations and anticipates continued margin outperformance from BorgWarner Inc. (NYSE:BWA).