Kepler Cheuvreux has upgraded ABB LTD from Hold to Buy and lifted its price target to CHF70.00 from CHF56.00. The research house based this change on a combination of corporate restructuring over the past five years and management-system improvements, which it says position ABB to capture stronger revenue and earnings outcomes.
According to InvestingPro data referenced by the analyst, ABB was profitable over the last twelve months, although it is trading at a relatively high price-to-earnings ratio. Kepler Cheuvreux identified the companys portfolio optimization and the refinement of its management processes as central reasons for the more constructive stance.
In its updated modeling, Kepler Cheuvreux increased its 2027 revenue projections by 5% and raised operating EBITA estimates by 8% versus its prior forecasts, positioning those metrics above current consensus. The firm attributed those upward revisions to ABBs closer alignment with structural growth trends across key end markets and geographies - an alignment the analyst believes will push revenue and earnings toward the upper end of ABBs stated target ranges.
Kepler Cheuvreux singled out ABBs Electrification and Motion divisions as the principal engines expected to deliver growth, improved profitability and stronger cash flow. Those divisions are identified as the focal points through which revenue expansion and margin gains are likely to materialize.
Separately, the analyst noted the companys recent USD5.4 billion divestment of its Robotics business. Kepler Cheuvreux projects that, once the transaction is complete, ABB will emerge with one of the strongest balance sheets in its sector by year-end. The firm said that such balance-sheet strength would support what it described as "an acceleration of accretive M&A, organic investments, rising dividends, and SBBs."
The upgrade and model revisions reflect Kepler Cheuvreuxs view that ABBs strategic moves and management discipline have created scope for higher growth and greater capital deployment. At the same time, the firms commentary underscores the centrality of the Electrification and Motion segments and the balance-sheet effects of the Robotics divestment to its outlook.
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