BorgWarner, Inc. (BWA) is expected to benefit from the growing demand for its strong technology-based product portfolio. About $1.95 billion of new powertrain business is expected between 2008 and 2010. The company expects a 500% increase in demand for its DualTronic transmission modules by 2013.

Moreover, the company has healthy financials with low debt and has taken further initiatives to maintain margins in the challenging North American industry environment. However, due to high raw material costs and price concessions to automotive makers, we rate the shares a Hold, with a target of $40, which is derived from our 2008 EPS estimate, and a forward multiple of 13.7x.

On September 3, BorgWarner announced that it will supply Cam Torque Actuated (CTA) variable cam timing technology for the upgraded Duratec 3.0-liter V-6 engine, debuting in the 2009 Ford Escape. CTA a patented technology of BorgWarner improves engine performance and fuel the economy