Is There Now An Opportunity In ABB Ltd (VTX:ABBN)?

ABB Ltd (VTX:ABBN) saw a double-digit share price rise of over 10% in the past couple of months on the SWX. The company's trading levels have approached the yearly peak, following the recent bounce in the share price. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine ABB’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for ABB

Is ABB Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 17.91% above our intrinsic value, which means if you buy ABB today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is CHF42.54, there’s only an insignificant downside when the price falls to its real value. In addition to this, ABB has a low beta, which suggests its share price is less volatile than the wider market.

What does the future of ABB look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. ABB's earnings over the next few years are expected to increase by 31%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? ABBN’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on ABBN, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into ABB, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 1 warning sign for ABB you should know about.

If you are no longer interested in ABB, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.