At The Motley Fool, we poke plenty of fun at Wall Street analysts and their endless cycle of upgrades, downgrades, and "initiating coverage at neutral." So you might think we'd be the last people to give virtual ink to such "news." And we would be -- if that were all we were doing.

But in "This Just In," we don't simply tell you what the analysts said. We'll also show you whether they know what they're talking about. To help, we've enlisted Motley Fool CAPS, our tool for rating stocks and analysts alike. With CAPS, we'll be tracking the long-term performance of Wall Street's best and brightest -- and its worst and sorriest, too.

And speaking of the best ...
When a highly rated analyst upgrades the stock of a high-quality company, you'd ordinarily expect the latter to get a bump from the former. Ordinarily, but not always, as Motley Fool Stock Advisor members found out yesterday.

For BorgWarner's (NYSE:BWA) failure to receive the customary analyst bump, I blame Lehman Brothers' bad timing. On the very day these guys decided to bless an auto-parts stock, used-car superstore CarMax (NYSE:KMX) crushed all things automotive with its underwhelming earnings report and discontinued guidance. Considering the carnage, though, BorgWarner got off easy with its 1.3% loss. Higher-profile targets, including Ford (NYSE:F) and GM (NYSE:GM), just got killed yesterday.

Either way, the damage is done. And the more I think about it, the more I think investors should thank Lehman for its bad timing, because Lehman's right. BorgWarner's a buy. And I'll tell you why in a minute.

But first, let's go to the tape
First, let me show you how very wrong Lehman's been on this industry so far:


Lehman Said:

CAPS Says (5 Max):

Lehman's Pick Lagging S&P by:

Cummins  (NYSE:CMI)



66 points




16 points

Dana Holding (NYSE:DAN)



8 points

Clearly, there's a reason Lehman analysts wear pinstripes and wingtips to work, rather than overalls and workboots. Grease monkeys, these guys ain't.

Still, there's something to be said for the power of trial and error. Given enough time and patience, the rawest novice driver can eventually learn how to work a stick shift. (I know. I've taught a few myself.) Similarly, Lehman was bound to stumble across a winner eventually -- and in BorgWarner, I think it's found one.

According to Lehman, BorgWarner is the "best-positioned auto parts supplier in the industry," in that it manufactures products geared to the needs of a $4-a-gallon world: engine parts that boost fuel economy, lower emissions, and improve vehicle performance. Lehman is especially fond of BorgWarner's turbocharged gasoline-direct-injection engines, which the analyst expects will rev up sales "at least until 2015." And considering that BorgWarner's sales have averaged 14% annual growth over the past five years, and 18% last year alone, Lehman looks to be on the right track with its prediction.

What's more, the price is right. Based on trailing-12-month earnings, BorgWarner sells for a price-to-earnings ratio of 18, which seems entirely reasonable based on consensus expectations of 17% earnings growth over the next half-decade.

Foolish takeaway
Every dog has its day, and even a bad analyst makes the occasional good call. For Lehman, that call was yesterday's buy recommendation on BorgWarner. Listen to the analyst on this one.