ABB Ltd (ABBNY) AI Stock Analysis

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ABB Ltd

(OTC:ABBNY)

Rating:79Outperform

Price Target:―

ABB Ltd's overall stock score reflects a solid financial performance and positive earnings call highlights, particularly in order growth and margin improvements. While the technical analysis indicates positive momentum, the valuation suggests a premium price, which may limit upside potential. Challenges in the Robotics segment and economic uncertainties are notable risks, but the company's strong fundamentals provide a stable outlook.

ABB Ltd (ABBNY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$104.21B

Dividend Yield1.05%

Average Volume (3M)6.57K

Price to Earnings (P/E)25.5

Beta (1Y)0.95

Revenue Growth2.08%

EPS Growth14.80%

CountryUS

Employees110,970

SectorIndustrials

Sector Strength93

IndustryElectrical Equipment & Parts

Share Statistics

EPS (TTM)0.60

Shares Outstanding1,843,899,200

10 Day Avg. Volume19,709

30 Day Avg. Volume6,569

Financial Highlights & Ratios

PEG Ratio4.52

Price to Book (P/B)7.16

Price to Sales (P/S)0.00

P/FCF Ratio25.61

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$52.45

Price Target Upside-7.89% Downside

Rating ConsensusModerate Buy

Number of Analyst Covering3

ABB Ltd Business Overview & Revenue Model

Company DescriptionABB Ltd manufactures and sells electrification, automation, robotics, and motion products for customers in utilities, industry and transport, and infrastructure in Switzerland and internationally. Its Electrification segment provides electric vehicle charging infrastructure, renewable power solutions, modular substation packages, distribution automation products, switchboards and panel boards, switchgears, UPS solutions, circuit breakers, measuring and sensing devices, control products, wiring accessories, enclosures and cabling systems, and intelligent home and building solutions. The company's Robotics & Discrete Automation segment offers industrial robots, software, autonomous mobile robotics, robotic solutions, field services, spare parts, and digital services. This segment also provides solutions based on its programmable logic controllers, industrial PCs, servo motion, transport systems, and machine vision. Its Motion segment designs, manufactures, and sells drives, motors, generators, and traction converters that are driving the low-carbon future for industries, cities, infrastructure, and transportation. The company's Process Automation segment develops and sells control technologies, advanced process control software and manufacturing execution systems, sensing, measurement and analytical instrumentation, marine propulsion systems, and turbochargers. This segment also offers remote monitoring, preventive maintenance, asset performance management, emission monitoring, and cybersecurity services. It serves aluminum, automotive, battery manufacturing, buildings and infrastructure, cement, channel partners, chemical, data centers, food and beverage, process automation, life sciences, ports, marine, mining, oil and gas, ports, power generation, printing, pulp and paper, railway, smart cities, water, and wind power industries. The company was founded in 1883 and is headquartered in Zurich, Switzerland.

How the Company Makes MoneyABB Ltd generates revenue through a diversified business model that encompasses four main divisions: Electrification, Industrial Automation, Motion, and Robotics & Discrete Automation. The Electrification segment provides electrical solutions and components that are essential for power distribution and management. The Industrial Automation division offers control systems, measurement products, and related services that optimize industrial processes. The Motion segment supplies motors, drives, and services that improve energy efficiency and performance in various applications. Lastly, the Robotics & Discrete Automation division delivers robotic systems and software, catering primarily to the manufacturing industry. ABB's revenue streams are bolstered by its strong global presence and strategic partnerships, which help it tap into emerging markets and technological advancements.

ABB Ltd Financial Statement Overview

Summary

ABB Ltd exhibits a solid financial performance with healthy profitability, efficient cost management, and a strong equity base. Revenue growth is steady but not rapid, and the company maintains a moderate level of debt. Cash flow generation is strong, though there is a slight decline in free cash flow growth. Overall, the company is financially sound with a stable outlook.

Income Statement

Very Positive

ABB Ltd demonstrates a strong and stable financial performance with consistent revenue growth over the past few years. The TTM Gross Profit Margin stands at 38.42%, which is quite robust for the industry. The Net Profit Margin for the TTM is 12.55%, indicating solid profitability. Revenue growth rate between the last two annual periods (2024 and 2023) is modest at 1.91%, but the consistent EBIT and EBITDA margins of 16.47% and 19.52% respectively, reflect efficient cost management and operational efficiency.

Balance Sheet

Positive

The company's balance sheet reflects a stable financial position with a Debt-to-Equity ratio of 0.64, suggesting a moderate level of leverage. The Equity Ratio is a healthy 31.82% for the TTM, implying a strong equity base relative to assets. However, the Return on Equity (ROE) is 30.57% for the TTM, indicating strong returns to shareholders, which is a positive for the financial health of the business.

Cash Flow

Positive

Cash flow analysis reveals robust operating cash flow with an Operating Cash Flow to Net Income ratio of 1.12 in TTM, illustrating strong cash generation relative to net income. The Free Cash Flow Growth Rate is slightly negative at -1.46% from 2024 to TTM, but Free Cash Flow to Net Income ratio remains solid at 0.91, indicating effective cash management despite a slight decrease in free cash flow.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
32.91B	32.85B	32.23B	29.45B	28.95B	26.13B
	Gross Profit
12.65B	12.27B	11.21B	9.71B	9.47B	7.88B
	EBIT
5.42B	5.07B	4.87B	3.34B	5.72B	1.59B
	EBITDA
6.43B	6.13B	5.83B	4.34B	6.83B	2.47B
	Net Income Common Stockholders
4.13B	3.94B	3.75B	2.48B	4.55B	345.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.36B	5.64B	5.82B	4.88B	5.33B	5.39B
	Total Assets
42.46B	40.36B	40.94B	39.15B	40.26B	41.09B
	Total Debt
8.71B	7.81B	8.74B	8.55B	6.48B	7.12B
	Net Debt
4.21B	3.50B	4.85B	4.39B	2.32B	3.84B
	Total Liabilities
28.35B	25.30B	26.79B	25.88B	24.30B	25.09B
	Stockholders Equity
13.52B	14.49B	13.41B	12.78B	15.58B	15.69B
Cash Flow		Free Cash Flow
3.77B	3.83B	3.52B	525.00M	2.51B	999.00M
	Operating Cash Flow
4.63B	4.67B	4.29B	1.29B	3.33B	1.69B
	Investing Cash Flow
-1.34B	-725.00M	-1.61B	981.00M	2.31B	6.76B
	Financing Cash Flow
-2.88B	-3.33B	-2.90B	-2.39B	-4.97B	-8.18B

ABB Ltd Technical Analysis

Technical Analysis Sentiment

Positive

Last Price56.94

Price Trends

50DMA

53.29

Positive

100DMA

54.01

Positive

200DMA

54.88

Positive

Market Momentum

MACD

1.36

Negative

RSI

62.64

Neutral

STOCH

75.97

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ABBNY, the sentiment is Positive. The current price of 56.94 is above the 20-day moving average (MA) of 55.18, above the 50-day MA of 53.29, and above the 200-day MA of 54.88, indicating a bullish trend. The MACD of 1.36 indicates Negative momentum. The RSI at 62.64 is Neutral, neither overbought nor oversold. The STOCH value of 75.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ABBNY.

ABB Ltd Risk Analysis

ABB Ltd disclosed 27 risk factors in its most recent earnings report. ABB Ltd reported the most risks in the “Macro & Political” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

ABB Ltd Peers Comparison

Overall Rating

UnderperformOutperform

Sector (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVT	81 Outperform	$10.74B	18.63	7.63%	1.20%	-5.12%	1.69%
ABBNY	79 Outperform	$104.21B	25.46	31.50%	1.05%	2.08%	14.80%
HUBB	78 Outperform	$20.85B	26.42	25.78%	1.30%	1.97%	10.22%
VRT	74 Outperform	$39.69B	60.38	32.82%	0.12%	20.45%	66.80%
AYI	73 Outperform	$8.04B	19.72	17.86%	0.25%	2.78%	11.53%
Sector *	65 Neutral	$4.41B	12.06	5.22%	249.80%	4.09%	-12.16%
BE	65 Neutral	$4.52B	―	0.86%	―	20.95%	―

* Industrials Sector Average

Performance Comparison

ABBNY

ABB Ltd

56.94

3.08

5.72%

AYI

Acuity Brands

260.14

7.35

2.91%

HUBB

Hubbell B

390.59

-2.06

-0.52%

NVT

nVent Electric

65.23

-17.09

-20.76%

Bloom Energy

19.48

2.95

17.85%

VRT

Vertiv Holdings

104.14

-0.88

-0.84%

ABB Ltd Earnings Call Summary

Earnings Call Date:Apr 17, 2025

(Q1-2025)

% Change Since: 11.60%|

Next Earnings Date:Jul 17, 2025

Earnings Call Sentiment Positive

The earnings call reflects a strong start for ABB with notable achievements in order growth, margin improvements, and sustainability progress, despite challenges in the Robotics segment and the uncertainty posed by tariffs and economic conditions.

Q1-2025 Updates

Positive Updates

Strong Start to the Year

ABB experienced a strong start to the year with a 5% increase in comparable orders from last year, beating expectations for operational EBITDA margin across all business areas, and achieving a free cash flow of $652 million, positioning them well for the year ahead.

Significant Margin Improvements

Gross margin improved by 280 basis points to 41.7% and operational EBITDA margin reached 20.2% with a notable one-time contribution of 170 basis points.

Electrification Record Orders

The Electrification segment achieved a new all-time high with $4.4 billion in orders, marking a 2% increase on a comparable basis.

Sustainability Achievements

ABB is close to reaching its 2030 sustainability targets with a 78% reduction in CO2 emissions from the 2019 baseline and helped customers avoid 66 megatons of emissions in 2024.

Robust Regional Performance

Growth was seen across all regions: Americas up 11%, Asia, Middle East, and Africa up 4%, with China seeing a positive order growth of 13% after 10 quarters of decline.

Negative Updates

Challenges in Robotics and Discrete Automation

The Robotics and Discrete Automation segment saw a decline in comparable revenues by 11% year on year, with a decrease in operational EBITDA margin by 330 basis points to 9.9%.

Impact of Tariffs and Economic Uncertainty

The uncertainty from U.S. tariffs and economic conditions posed challenges, with potential impacts on customer decision-making and the overall market environment.

Lower Large Order Bookings in Motion

Motion segment faced a decline in order intake due to lower large order bookings, particularly in the traction division.

Company Guidance

During the first quarter of fiscal year 2025, ABB reported a 5% increase in comparable orders, with a notable operational EBITDA margin of 20.2%, enhanced by a 170 basis point boost from a one-time event. The company's free cash flow reached $652 million, setting a positive trajectory to surpass the $3.9 billion achieved in the previous year. In terms of sustainability, ABB reduced its CO2 emissions by 78% from the 2019 base level and helped customers avoid 66 megatons of emissions in 2024. The revenue chart showed $7.9 billion in sales with 3% comparable growth, although slightly below expectations due to slower order conversion. Regionally, the Americas led with an 11% increase, while China saw a 13% growth in orders after a prolonged decline. ABB's gross margin improved by 280 basis points to 41.7%, and its Return on Capital Employed (ROCE) reached 23%, improving by 250 basis points. The company plans to spin off its Robotics division as a separately listed entity to enhance value creation, targeting a listing by the second quarter of 2026. The outlook for 2025 remains unchanged, with expectations for mid-single-digit comparable revenue growth and improved operational EBITDA margins, assuming stable global economic conditions.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.