ABB: Capital Markets Day Reveals Growth Strategy; Upgraded Midterm Targets Are Achievable

Wide-moat ABB revealed upgraded midterm targets at its Capital Markets Day that appear achievable and had already been broadly incorporated into our forecasts. Turnaround specialist Bjorn Rosengren has successfully executed on his strategy implemented in 2020, raising profitability through improved cost measures and portfolio management. With a solid foundation in place, the group will now focus on growth, having underperformed its Cap Goods peer group. While financial targets were upgraded, we still believe peers such as Schneider Electric enjoy a superior outlook to due their more extensive digital offerings. We maintain our CHF 36.5 fair value estimate for ABB and view shares as fairly valued.