ABB is a 130-year-old startup. After divesting its lower-margin businesses, it remains as a pure-play on the modernization of the industrial world.
The Twin Engines: Electrification & Robotics
- Electrification: The grid needs to triple in capacity. Data centers are demanding GW-scale power. ABB’s order backlog ($8.69B) reflects this insatiable demand.
- Robotics: With the upcoming spin-off expected in 2026, the market will finally value this jewel separately. ABB holds a 75% market share in collaborative robots.
Analyst Sentiment & Valuations
Wall Street is split, which is exactly where we like to be.
- The Bear Case: Valuation concerns. “Hold” ratings dominate because the stock isn’t “cheap” by traditional industrial metrics.
- The Bull Case: Citi and others see the Robotics spin-off as a catalyst for unlocking value that isn’t on the balance sheet today.
The 2025 Investing Thesis
75% of manufacturing leaders expect to increase EV production. The Internet of Robotic Things is growing at 14% CAGR.
ABB sits at the intersection of these vectors.
Management’s Goal: An operational EBITA margin of 18-22%. If they hit this while growing comparable revenue at 5-7%, ABB becomes a compounding machine with a defensive moat that software companies can only dream of.