ABB Has To Deliver Against Higher Expectations

The hiring of Bjorn Rosengren as ABB’s (ABB) CEO has gone over well with analysts and investors, helping spur about 15% of relative outperformance for the shares since that announcement, but there’s a lot of work still to be done. ABB most definitely has areas of strength (drives, robots, et al), but it also has a lot of issues that need to be addressed, including sub-scale share in a wide range of markets, weak margins in several segments, and a long history of lackluster performance. The potential is there, but potential has produced next to nothing tangible for investors over the last decade.

I bullish on what ABB could be, but I think that has to be tempered with what it is today, and that is an underperforming multi-industrial with a lot of “problem areas”. Markets like electrification and automation have very attractive long-term prospects, and the company has a proven CEO at the helm, but the Street’s benefit of the doubt is only going to last so long.

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ABB Has To Deliver Against Higher Expectations