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Investing.com - TD Cowen has raised its price target on ABB Ltd (SIX:ABBN) (NYSE:ABB (ST:ABB)) to $55.00 from $50.00 while maintaining a Hold rating on the stock. The company has shown strong momentum with a remarkable 179.52% year-to-date return, according to InvestingPro data.
The firm cited resilient orders and high backlog as key factors supporting the price target increase ahead of ABB’s second-quarter results, scheduled for August 28, 2025. The company maintains a healthy gross profit margin of 34.91%.
TD Cowen noted that ABB’s electrification business is currently carrying significant weight for the company while waiting for a recovery in short-cycle markets, which could eventually serve as a positive catalyst.
The research firm’s analysis indicates that peer EBITDA multiples suggest room for ABB to potentially re-rate higher in the market.
Despite the price target increase, TD Cowen maintained its Hold rating, noting that its target already incorporates healthy free cash flow multiples of over 26 times for fiscal year 2025 and 22 times for fiscal year 2026. For comprehensive valuation analysis and additional insights, explore InvestingPro’s advanced valuation tools and expert recommendations.
In other recent news, ABB has experienced several significant developments. Kepler Cheuvreux downgraded ABB from buy to hold, citing valuation concerns as the company’s stock trades at a premium compared to pre-COVID levels. The firm set a price target of CHF50.00 and noted ABB’s slowing profit and cash growth. Additionally, CFRA also downgraded ABB to hold, reducing the price target from CHF58.00 to CHF45.00, due to potential economic headwinds and trade tensions affecting the company’s near-term performance. CFRA adjusted its earnings projections, lowering the 2025 EPS estimate to $2.28 but maintaining the 2026 forecast at $2.70, reflecting confidence in ABB’s long-term growth potential. Despite these challenges, ABB’s strong balance sheet positions it for potential mergers and acquisitions, with over $5 billion in capacity. Kepler Cheuvreux highlighted an increase in operating EBITA estimates and profit projections for ABB’s Process Automation division. Both firms acknowledge ABB’s potential to benefit from long-term trends in automation and electrification.
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