Tuesday, February 10, 2015

Seeking Alpha: ABB Facing Power Outages In Multiple End Markets

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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