ABB: Stifel starts coverage with 'buy'

(CercleFinance.com) - Stifel on Thursday initiated the coverage of ABB with a "buy" rating and a target price of 35 Swiss francs, hinting at a 30-40% upside potential.


With its offering, the industrial conglomerate addresses key challenges of our time, including energy and manufacturing transition, energy efficiency and automation, the brokerage firm said.

Transformational divestments and introduction of a decentralised organisation enable stronger growth and sustainably higher margins, it added.

Stifel said it expects a FY 21-24 EBIT CAGR of about 7% and margins to expand by 130 basis points to around 15.5%.

"Pending smaller divestments and leverage potential provide ample headroom for share buybacks," the broker noted.

Stifel said it sees a free option in a right buyback timing that could yield up to 10% upside to its price target.

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