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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

ABB's End Markets Show Mixed Recovery but With Solid Underlying Robotics Demand

Analyst Note

| Denise Molina, CFA |

Following ABB's recently released first quarter, including 7% organic revenue growth, details on the results show that the firm's 2021 revenue recovery to prepandemic levels is likely to be uneven divisionally. The company's end markets include some depressed ones like automotive, cruise ships, and oil and gas. However, those mask underlying solid growth, and EBITA margin expansion continues to track well--13.4% in the first quarter--increasing the likelihood that medium-term margins achieve the upper end of management's 13%-16% target.  We will review our forecasts and expect to make around a 5% increase to our fair value estimate before currency effects. We maintain our wide moat rating.

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Company Profile

Business Description

ABB is a global supplier of electrical equipment and automation products. Founded in the late 19th century, the company was created out of the merger of two old industrial companies--ASEA and BBC--and is now called Asea Brown Boveri Group, or ABB. The company is the number-one or number-two supplier in all of its core markets and the number-two robotic arm supplier globally. In automation, it offers a full suite of products for both discrete and process automation as well as industrial robotics.

Contact
Affolternstrasse 44
Zurich, 8050, Switzerland
T +41 433177111
Sector Industrials
Industry Electrical Equipment & Parts
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 105,330

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