What Is ABB Ltd's (VTX:ABBN) Share Price Doing?

Today we're going to take a look at the well-established ABB Ltd (VTX:ABBN). The company's stock saw a significant share price rise of 22% in the past couple of months on the SWX. The company is now trading at yearly-high levels following the recent surge in its 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. But what if there is still an opportunity to buy? Let’s take a look at ABB’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for ABB

What Is ABB Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 4.41% 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 that the stock is really worth CHF48.25, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, ABB’s share price may be more stable over time (relative to the market), as indicated by its low beta.

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 33%, 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 track record of its management team. 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 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 is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. In terms of investment risks, we've identified 1 warning sign with ABB, and understanding this should be part of your investment process.

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.

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