ABB: An Enabler of the Multi-Decade Decarbonization Megatrend; Raising Our FVE by 12%

We're raising our fair value estimate in ABB by 12% to CHF 45.5 from CHF 40.5. ABB's extensive portfolio of electrical equipment and its variable speed drives are direct beneficiaries of the multi-decade energy transition and decarbonization megatrends, which justify a higher stage 2 growth rate of 5% from our previous assumption of 4%. We assume 8% annualized EPS growth through 2028, which given the group's conglomerate status and limited stand-alone software offering, underperforms Schneider Electric. Shares appear slightly overvalued.