ABB: Oddo still a buyer after agreement with Hitachi

(CercleFinance.com) - This morning ABB announced an agreement with Hitachi to sell its electrical network business for an enterprise value of 11 billion dollars, which represents 11.
2x this division's EBITA.

Oddo points out that the stock has fallen in 2018 and has increased its discount relative to the sector, which offers a sound entry point. The broker hence confirms its buy rating on the share, along with its target price of 25.5 Swiss francs, which represents upside potential of 30%.

ABB's management also claims that it wants to quickly and “effectively” return 7.6 billion-7.8 billion dollars to shareholders, probably through share buybacks: this represents almost 19% of the group's capitalisation, Oddo says.

Analysts add that the Swiss group wants to simplify its organisation and reduce its recurrent indirect costs by 500 million dollars with a single restructuring cost of the same amount (500 million dollars).


Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.