ABB Ltd

ABBN: XSWX (CHE)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	CHF 74.90	Vnls	Yldvtsrq

Operational Improvements Will Support Structurally Higher Profitability at ABB; FVE Slightly Raised

Matthew Donen

Sep 12, 2023

We raise our fair value estimate to CHF 36.5 from CHF 35.0 per share for wide-moat ABB, underpinned by its shift toward a decentralized business model that will support structurally higher profitability and better reflects its underlying competitive advantages. The appointment of CEO Bjorn Rosengren, a turnaround specialist, has coincided with an increase in profitability through improved cost measures and active portfolio management. Shares are trading at a slight discount to our revised fair value estimate, but we require a greater margin of safety, especially since both Siemens and Schneider enjoy a superior outlook.

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