Saturday, December 20, 2014

Seeking Alpha: The Going's Getting Tougher, But ABB Is Still Going

Swiss industrial conglomerate ABB (NYSE:ABB) largely did what it needed to with its September capital markets day, reassuring investors that management is moving to fix the problems in the Power businesses, that automation remains in good health, and that capital returns to shareholders were a priority.

Since then, though, ABB has seen some adverse developments. Europe's economy, as reflected by metrics like Germany's PMI, has been looking soft and tumbling oil prices threaten a sizable end-market for the Process Automation business. Add to that that ABB was already being somewhat bold in projecting market-beating growth, and it is perhaps not so surprising that a lot of sell-side analysts have cooled on the shares.

There are certainly risks in front of ABB, but that is always going to be true for an international industrial conglomerate. ABB's plans to turn around the Power operations still appear credible and while automation orders from the oil/gas sector are at risk, lower oil prices could stimulate more capex investment and demand from customers in other end markets. All told, ABB still looks like a credible stock to own today for investors looking to gain international and industrial exposure.

Read the full article here:
The Going's Getting Tougher, But ABB Is Still Going

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