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ABB Ltd - Stock Quote ABBN

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Morningstar's ABB Ltd Stock Analysis

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Is it the right time to buy or sell?
Is it the right time to buy or sell?

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ABB Shares Look Attractive Even When Factoring In a Slower 2023 Due to Potential Macro Headwinds

Analyst Note

| Denise Molina, CFA |

ABB shares look attractive after declining 15% since mid-March. We are maintaining our wide moat rating and CHF 35 fair value estimate. The company recently announced the delay of its e-mobility unit's initial public offering due to less favorable capital market conditions. The e-mobility unit is less than 2% of group revenue and is not the central part of our investment case. Our cash flow forecasts and company valuation depend more on the outlook for the ABB's restructuring execution as well as broad industrial demand for electrification components and automation equipment, including robotics. We see no change in the medium-term drivers for these. However, we are factoring in near-term slower demand from macro headwinds, mainly in our 2023 forecasts. With outsize demand since mid-2021, we factor in a cooling off of order and revenue growth in 2023, resulting in a reduction in our revenue growth assumption by around 100 basis points to 4% in 2023. Our 2022 forecasts are largely in line with company-provided consensus, but our 2023 EBITA operating forecast is around 4% below consensus. 

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ABB Ltd's 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. 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 discrete and process automation (continuous processes like chemical production) as well as industrial robotics.

Affolternstrasse 44
Zurich, 8050, Switzerland
T +41 433177111
Sector Industrials
Industry Electrical Equipment & Parts
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2022
Stock Type
Employees 104,720