Shares of BorgWarner Inc. rallied Monday after a Barclays analyst upgraded the auto parts maker, saying it is a good time to buy the stock after last week's sell-off.
BorgWarner will benefit from auto manufacturers needing its powertrain technology to meet more stringent fuel economy standards, said Barclays analyst Brian Johnson in a note to investors as he boosted his rating to "Overweight" from "Neutral."
The U.S. government in April announced new fuel standards for cars and trucks, calling for an average of 35.5 miles per gallon within six years. That's about 10 mpg more than the current requirements.
Johnson maintained a price target of $48 on BorgWarner shares, implying gains of 29 percent from Friday's closing price. Shares jumped $3.36, or 9.1 percent, to $40.45 in afternoon trading Monday as the broader market rallied on a $1 trillion economic rescue package unveiled in the European Union. BorgWarner shares have ranged from $26.51 to $44.55 over the past year.
BorgWarner shares tumbled more than 14 percent last week as the Standard & Poor's 500 shed 6.4 percent over worries about the debt crisis in Europe.