ABB Ltd (ABBNY) AI Stock Analysis

1,200 Followers

Top Page

ABB Ltd

(OTC:ABBNY)

75Outperform

ABB Ltd's strong financial performance and positive earnings call guidance are key strengths, supporting a stable outlook. The technical analysis suggests a neutral trend, while the valuation indicates the stock may be slightly overvalued. Overall, ABB is well-positioned in its industry with solid operational foundations, though it faces some challenges in specific segments.

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

Market Cap

$91.04B

Dividend Yield1.18%

Average Volume (3M)221.40K

Price to Earnings (P/E)23.2

Beta (1Y)1.02

Revenue Growth3.16%

EPS Growth5.77%

CountryUS

Employees109,900

SectorIndustrials

Sector Strength70

IndustryElectrical Equipment & Parts

Share Statistics

EPS (TTM)2.13

Shares Outstanding1,860,614,900

10 Day Avg. Volume97,056

30 Day Avg. Volume221,398

Financial Highlights & Ratios

PEG Ratio4.03

Price to Book (P/B)N/A

Price to Sales (P/S)12.61

Price to Cash Flow (P/CF)13.70

P/FCF Ratio15.30

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$52.59

Price Target Upside6.44% Upside

Rating ConsensusHold

Number of Analyst Covering4

ABB Ltd Business Overview & Revenue Model

Company DescriptionABB Ltd (ABBNY) is a leading global technology company headquartered in Zurich, Switzerland. It operates primarily in the sectors of electrification, robotics, automation, and motion, providing a wide range of products and services. ABB’s core offerings include electrical equipment and components, industrial robots, and automation systems, which are designed to enhance productivity and efficiency across various industries such as utilities, industry, transport, and infrastructure.

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 strong financial health with consistent revenue growth and healthy profitability margins. The balance sheet is stable with moderate leverage and strong equity returns, while cash flow statements indicate robust cash generation capabilities.

Income Statement

Very Positive

ABB Ltd has demonstrated strong revenue growth with a Revenue Growth Rate of 1.90% over the last year. The company maintains healthy profitability margins, with a Gross Profit Margin of 37.37% and a Net Profit Margin of 11.98% for 2024. Additionally, the EBIT and EBITDA margins are solid at 15.43% and 18.68% respectively. These indicators suggest a stable and profitable income statement performance.

Balance Sheet

Positive

The company's balance sheet is robust with a Debt-to-Equity Ratio of 0.54, indicating moderate leverage. The Equity Ratio stands at 35.89%, showing a balanced capital structure. Return on Equity (ROE) is strong at 27.16%, reflecting efficient use of equity to generate profits. Overall, ABB Ltd's balance sheet reflects financial stability with manageable debt levels, though there's room for improvement in equity strength.

Cash Flow

Very Positive

ABB Ltd's cash flow performance is impressive, with a Free Cash Flow Growth Rate of 8.81% year-over-year. The Operating Cash Flow to Net Income Ratio is 1.19, indicating strong cash generation relative to net income. The Free Cash Flow to Net Income Ratio is at 0.97, reflecting efficient conversion of net income into free cash flow. The cash flow statements suggest solid operational cash generation and effective capital management.

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

ABB Ltd Technical Analysis

Technical Analysis Sentiment

Negative

Last Price49.41

Price Trends

50DMA

53.75

Negative

100DMA

54.63

Negative

200DMA

54.96

Negative

Market Momentum

MACD

-0.60

Positive

RSI

40.06

Neutral

STOCH

-3.07

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ABBNY, the sentiment is Negative. The current price of 49.41 is below the 20-day moving average (MA) of 52.26, below the 50-day MA of 53.75, and below the 200-day MA of 54.96, indicating a bearish trend. The MACD of -0.60 indicates Positive momentum. The RSI at 40.06 is Neutral, neither overbought nor oversold. The STOCH value of -3.07 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VRT	76 Outperform	$25.79B	52.77	22.29%	0.18%	16.74%	9.28%
ABBNY	75 Outperform	$91.04B	23.24	28.23%	1.18%	3.16%	5.77%
AYI	71 Outperform	$7.41B	18.17	17.86%	0.26%	2.78%	11.53%
HUBB	71 Outperform	$18.93B	24.58	25.26%	1.44%	4.76%	2.27%
NVT	66 Neutral	$8.21B	25.28	8.73%	1.54%	0.78%	-41.54%
Sector *	62 Neutral	$7.62B	13.01	3.19%	3.32%	3.77%	-14.28%
BE	59 Neutral	$4.07B	―	-5.49%	―	10.53%	90.76%

* Industrials Sector Average

Performance Comparison

ABBNY

ABB Ltd

49.41

3.78

8.28%

AYI

Acuity Brands

239.76

-12.16

-4.83%

HUBB

Hubbell B

353.43

-44.09

-11.09%

NVT

nVent Electric

49.86

-23.60

-32.13%

Bloom Energy

17.64

7.40

72.27%

VRT

Vertiv Holdings

69.61

-10.96

-13.60%

ABB Ltd Earnings Call Summary

Earnings Call Date: Jan 30, 2025 | % Change Since: -11.28% | Next Earnings Date: Apr 17, 2025

Earnings Call Sentiment Neutral

ABB reported a record year with significant achievements in operational performance, notably in the Electrification segment and overall regional growth. However, challenges in Robotics and Discrete Automation, as well as continued struggles in China and substantial losses in the E-mobility segment, present ongoing obstacles.

Highlights

Record Year for ABB

ABB achieved a new record level for operational EBITA margin at 18.1% and a gross margin all-time high of 37.4%. Earnings per share increased by 6%, and the company delivered a free cash flow of $3.9 billion, with a free cash flow margin of 12%.

Electrification Segment Success

Electrification orders were up by 16% with a revenue growth of 11%, surpassing $4 billion for the first time. Operational EBITA improved by 19% to $863 million, resulting in a margin of 21.3%.

Strong Regional Growth

ABB's orders were up in all three regions. Europe saw a 9% increase, while the Americas improved by 7%. Excluding the backlog adjustments, China was only down by 1%.

Improvements in Robotics and Discrete Automation

Robotics and Discrete Automation turned a corner with positive order growth after eight quarters in decline, despite backlog adjustments.

Lowlights

Challenges in Robotics and Discrete Automation

While order growth was positive, backlog adjustments in Robotics and Discrete Automation led to de-bookings of about $130 million, significantly impacting growth.

Continued Weakness in China

China's orders were impacted by backlog adjustments, leading to a reported decline of 11%. Excluding these adjustments, China still faced challenges with a decline of 1%.

E-mobility Segment Losses

The E-mobility segment experienced significant losses of $272 million in 2024, with expectations of continued, albeit reduced, losses in 2025.

Company Guidance

During the call, ABB's management provided guidance reflecting a strong performance in 2024, with several key metrics indicating growth and improvement. The operational EBITA was up by 10% year-on-year, reaching a new record margin level of 18.1%. The company's free cash flow was reported at $3.9 billion, translating to a 12% margin, marking the second year of double-digit free cash flow margins. Return on Capital Employed (ROCE) stood at 22.9%, above the target of greater than 18%. For 2025, ABB expects mid-single-digit comparable revenue growth and further improvement in operational EBITA margin. The company also announced a new share buyback program of up to $1.5 billion. Despite challenges in certain business areas, ABB anticipates positive developments and aims to achieve new records in 2025.

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.