Should You Investigate ABB Ltd (VTX:ABBN) At CHF29.96?

Today we're going to take a look at the well-established ABB Ltd (VTX:ABBN). The company's stock received a lot of attention from a substantial price movement on the SWX over the last few months, increasing to CHF35.30 at one point, and dropping to the lows of CHF29.54. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether ABB's current trading price of CHF29.96 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at ABB’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for ABB

Is ABB Still Cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 5.5% below my intrinsic value, which means if you buy ABB today, you’d be paying a reasonable price for it. And if you believe the company’s true value is CHF31.72, then there’s not much of an upside to gain from mispricing. What's more, ABB’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will ABB generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. However, with a relatively muted profit growth of 2.5% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for ABB, at least in the short term.

What This Means For You

Are you a shareholder? It seems like the market has already priced in ABBN’s future outlook, 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 confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on ABBN, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.

Diving deeper into the forecasts for ABB mentioned earlier will help you understand how analysts view the stock going forward. So feel free to check out our free graph representing analyst forecasts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.