The conditions for ABB (NYSE:ABB) today are different than those for other industrial conglomerates like Eaton (NYSE:ETN), Honeywell (NYSE:HON), 3M (NYSE:MMM) and Emerson (NYSE:EMR).
On the negative side, ABB has sizable exposure to markets with weak (or
very weak) near-term outlooks, including oil/gas, mining, and utilities
and the company's Power operations still need work. On the positive
side, ABB has more balance sheet flexibility than most peers, leverage
to long-term growth in industrial automation, and at least the potential
to improve its margins in the coming years.
There are still risks
that ABB's expectations are too high and the company will be forced to
guide down (both for the short term and long term) in 2015. Likewise,
many companies talk about improving their cost structure, but many also
fail to do so. All that said, ABB shares seem to be excessively
discounted today and while I think there may be less near-term risk with
Eaton or Honeywell, I still like these shares as an aggressive/risky
long-term growth recovery play.
Read more here:
ABB Facing Power Outages In Multiple End Markets
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