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Investing.com - Citi has upgraded ABB LTD (NYSE:ST:ABB) from Neutral to Buy and raised its price target to CHF62.00 from CHF46.00, citing growth potential ahead of the company’s planned Robotics spin-off. The stock has shown remarkable momentum, delivering a 425% return year-to-date and 276% over the past six months, according to InvestingPro data.
The upgrade comes as ABB prepares for its Capital Markets Day scheduled for November and the anticipated Robotics division spin-off planned for 2026, which Citi believes will focus investor attention on the remaining company’s growth prospects. Despite current revenue decline of 23% and a WEAK Financial Health score, the company maintains a solid gross profit margin of 35%.
Citi expects ABB could increase its organic sales growth target from the current 5-7% to 6-8%, while also raising its group margin target to at least 18-21% from the current 16-19% once it operates with a more focused portfolio after the spin-off.
The investment bank identifies strong structural growth drivers in ABB’s Electrification business, noting that approximately one-third of this segment’s revenue has potential for double-digit top-line growth, primarily driven by datacenter and utility demand.
ABB, a Swiss-Swedish multinational corporation specializing in electrification, robotics, and industrial automation, trades on both the SIX Swiss Exchange (ABBN:SW) and the New York Stock Exchange (NYSE:ABB).
In other recent news, ABB Ltd (SIX:ABBN) has seen mixed analyst updates with a focus on earnings, revenue, and valuation concerns. TD Cowen raised its price target for ABB to $55, citing resilient orders and a strong backlog as key factors, while maintaining a Hold rating. In contrast, Kepler Cheuvreux downgraded ABB from Buy to Hold due to valuation concerns, setting a price target of CHF50 and noting that ABB’s valuation metrics are at a premium compared to pre-Covid levels. Kepler Cheuvreux also highlighted ABB’s strong balance sheet, indicating potential for over $5 billion in merger and acquisition activities. Meanwhile, CFRA downgraded ABB to Hold and lowered the price target to CHF45, reflecting a cautious outlook due to potential economic headwinds and trade tensions. CFRA also revised its earnings projections, cutting the 2025 EPS estimate but maintaining the 2026 forecast, suggesting confidence in ABB’s long-term growth potential. The firm emphasized that despite short-term challenges, ABB is well-positioned to benefit from trends in automation and infrastructure investments. These developments reflect varied perspectives among analysts regarding ABB’s current valuation and future growth prospects.
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