NEW YORK (AP) — A Sterne Agee analyst on Monday cut his rating for BorgWarner Inc. to "Neutral" from "Buy," predicting that weaker vehicle demand in Europe will slow the auto parts supplier's growth at least for the near term.

Michael Ward also pointed to the Auburn Hills, Mich.-based company's current stock price, saying that the shares have reached their fair level in light of the risks surrounding European demand.

He noted that industry wide vehicle production rates in Europe, which accounts for about half of BorgWarner's business, are expected to be down about 10 percent in the first quarter, with weak vehicle demand expected to last into the summer.

Ward cut his 2013 earnings prediction by 30 cents to $5 and his 2014 estimate by 25 cents to $5.75. Analysts, on average, expect a 2013 profit of $5.24 and a 2014 profit of $6.26, according to FactSet.

"In our view, BorgWarner's track record, growth prospects and ability to help vehicle manufacturers meet more stringent standards globally for fuel economy and emissions have rewarded the company with a premium valuation in the supplier group and we expect the favorable view to continue," Ward wrote in a note to investors.

BorgWarner shares fell 29 cents to $77 in premarket trading. They have traded in a 52-week range of $60.17 in late July after rising as high as $87.45 in March 2012.

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