Investing.com -- UBS upgraded BorgWarner to Buy from Neutral and raised its price target to $95 from $61, arguing the automotive supplier is uniquely positioned to capitalize on fast-growing non-automotive markets such as data-center power generation, battery energy storage systems (BESS), and power electronics.

The firm believes these opportunities could drive significant earnings growth and support a higher valuation multiple. Under UBS’s base case, BorgWarner’s valuation reaches $95 per share, while a more optimistic scenario could push the stock to $140 if adoption of its non-automotive technologies accelerates.

The brokerage estimates that by 2030, roughly 23% of BorgWarner’s revenue and 30% of EBIT could come from non-automotive businesses, helping fuel a projected 19% earnings-per-share CAGR between 2027 and 2030. UBS said the market appears to be underestimating the company’s power-generation potential, pricing in about 1.8GW of output by 2030 versus its forecast of 3.6GW.

A key pillar of the bullish thesis is BorgWarner’s TurboCell micro-turbine generator business, which UBS estimates could generate nearly $4 billion in revenue by 2030 if production capacity expands from 2GW to 4GW and utilization reaches about 90%. The firm expects power generation alone to account for around 20% of sales and 26% of EBIT by the end of the decade.

UBS also highlighted growth prospects in battery energy storage and power electronics, noting that BorgWarner is already quoting BESS projects with potential customers and has shipped inverter samples for microgrid applications. The firm sees additional upside from the shift toward 800VDC architectures in AI-focused data centers, where BorgWarner’s existing automotive power electronics expertise could provide a competitive advantage.