Assessing ABB (SWX:ABBN)’s Valuation After New Space and Green Marine Technology Deals

ABB (SWX:ABBN) has caught fresh attention after winning a Canadian Space Agency contract for lunar spectrometry work and teaming up with HDF Energy on megawatt scale hydrogen fuel cells for ships.

See our latest analysis for ABB.

These space and hydrogen milestones come after a steady run in the stock, with the latest share price at CHF 58.4, a solid year to date share price return of 18.8 percent and a powerful five year total shareholder return of 186.46 percent. This suggests momentum is still very much on ABB’s side.

If innovation led stories like ABB’s have your attention, it could be worth scanning aerospace and defense stocks for other industrial and space exposed names before they become crowded trades.

But with ABB now trading slightly above consensus targets and at a premium to its implied intrinsic value, investors must decide if this innovation pipeline still offers upside or if the market is already pricing in years of growth.

Most Popular Narrative: 3.5% Overvalued

With ABB closing at CHF 58.4 against a narrative fair value of roughly CHF 56.44, the dominant storyline sees only modest downside from here.

The analysts have a consensus price target of CHF51.106 for ABB based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CHF65.13, and the most bearish reporting a price target of just CHF36.98.

Read the complete narrative.

Want to see what justifies this near full valuation? The narrative leans on steadily rising margins, disciplined buybacks and a future earnings multiple usually reserved for sector leaders.

Result: Fair Value of $56.44 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, lingering weakness in key end markets and intensifying mid market robotics competition could quickly challenge both ABB’s earnings trajectory and its current premium valuation.

Find out about the key risks to this ABB narrative.

Build Your Own ABB Narrative

If you see the story differently, or simply prefer digging through the numbers yourself, you can build a complete view in minutes: Do it your way.

A great starting point for your ABB research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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