ABB (ABBN SW): Hold: Electrification backbone driving growth in Q2

研报英文原文证据摘录

ABB (ABBN SW): Hold: Electrification backbone driving growth in Q2

Equities ● Electrical Equipment

24 June 2026

Investment thesis: ABB, in our view, is well positioned for longer-term growth via automation

and electrification trends. Following the sale of the Robotics business, we expect to see further

margin expansion over time. CEO Morten Wierod is committed to driving the decentralisation

process – which started under the previous CEO, Bjorn Rosengren – deeper into the

organisation to achieve further margin growth.

After three years of a bolt-on M&A strategy, inorganic growth has lagged expectations (0.6% of

y-o-y revenue growth via M&A vs 1-2% targeted). Given higher y-o-y acquisition pipelines in

each business area, we expect to see more M&A activity, which remains a focus for cash

allocation. We see Electrification as a potential area for further M&A given current high demand

in the energy transition area.

We note that ABB lags peers on software integration, but that this is now perceived as a relative

advantage to software-heavier peers as investors assess risks from AI to monetising software.

We do not expect ABB to prioritise software M&A given management’s agnostic stance on

software.

Our new target price is CHF82 (up from CHF62), and we have a Hold rating on the stock as we

see supportive trends keeping momentum robust, despite the high valuation level. The recent

re-rating, we think, limits upside on the stock.

ABB: Changes to estimates

Following Q1 2026 results, our revised FX and M&A expectations, and company guidance for

2026 (comparable revenue growth of high single-digit to low double-digit; HSBCe 10.5%), we

increase our top-line estimates by 3%/6% for 2026e/28e. The higher drop-through impact