| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 30.70 | -54 |
| Intrinsic value (DCF) | 25.16 | -62 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 16.30 | -75 |
ABB Ltd (LSE: 0NX2.L) is a global leader in electrification, automation, robotics, and motion solutions, headquartered in Zurich, Switzerland. Founded in 1883, ABB serves diverse industries, including utilities, transportation, infrastructure, and manufacturing, with cutting-edge technologies that drive efficiency and sustainability. The company operates through four key segments: Electrification, Robotics & Discrete Automation, Motion, and Process Automation. ABB's Electrification segment provides critical infrastructure for electric vehicles, renewable energy, and smart buildings, while its Robotics division delivers advanced automation solutions for industrial applications. The Motion segment focuses on energy-efficient drives and motors, and Process Automation offers control systems for heavy industries like oil & gas and mining. With a strong emphasis on digitalization and sustainability, ABB is well-positioned to capitalize on global trends such as Industry 4.0, electrification, and decarbonization. The company's broad geographic footprint and diversified product portfolio make it a resilient player in the industrial sector.
ABB Ltd presents a compelling investment case due to its leadership in high-growth segments like electrification, automation, and robotics, which are critical for global energy transition and industrial digitalization. The company's strong financials, including CHF 32.85 billion in revenue and CHF 3.94 billion net income (FY 2024), reflect its operational efficiency. A healthy operating cash flow of CHF 4.68 billion supports its dividend (CHF 0.90 per share) and strategic investments. However, risks include exposure to cyclical industrial demand, geopolitical tensions affecting supply chains, and competition from regional players in automation. The stock's beta of 0.796 suggests moderate volatility relative to the market. Investors should monitor ABB's execution in integrating sustainability into its product offerings and its ability to maintain margins amid input cost pressures.
ABB holds a strong competitive position due to its technological leadership, global scale, and integrated solutions across electrification and automation. Its Electrification segment benefits from long-term trends in renewable energy and EV infrastructure, where ABB competes with differentiated products like modular substations and smart building solutions. In Robotics & Discrete Automation, ABB's industrial robots and software platforms compete on precision and adaptability, though it faces intense rivalry from Fanuc and Yaskawa in Asia. The Motion segment's energy-efficient drives and motors align with decarbonization goals, giving ABB an edge in industries transitioning to low-carbon operations. Process Automation leverages ABB's deep domain expertise in heavy industries, but competes with Siemens and Emerson in control systems. ABB's key advantages include its broad portfolio (enabling cross-selling), strong R&D (4.7% of revenue spent on innovation), and a services-led approach that drives recurring revenue. However, competitors like Siemens have stronger brand recognition in Europe, while regional players in Asia offer lower-cost alternatives. ABB's focus on digital solutions (e.g., ABB Ability platform) helps differentiate its offerings, but execution risks remain in scaling these technologies across diverse markets.