ABB

Company Update:
Orders beat consensus by 6% at $12.1bn (+40% comparable), driven by triple-digit growth in datacentres and double-digit growth in short-cycle businesses. The Americas led with +70% order growth, while China rose 25%. Revenues of $9.7bn (+14% comparable) were in line, as was operational EBITA at $2.0bn (+1% vs consensus), with margins expanding 170bp yoy. FCF reached $1.6bn (+2%).

Demand remains robust, particularly in datacentres and utilities, with improving machine automation and commercial building activity, while residential remains mixed.

2026 guidance was confirmed, targeting low-teens revenue growth and at least 270bp of margin expansion, partly supported by a CHF240m real-estate gain in Q4. Q4 margins should decline sequentially due to seasonality.

With strong Datacentre order growth already expected post Schneider Electric's release last week, we view the results in line with expectations. Moreover, the standing consensus and our estimates are already in line with the group's Q4 guidance excluding the real-estate gain. So, we will fine-tune our estimates and reiterate our Sell rating on the stock owing to an expensive absolute and relative valuation.

Expert Opinion:
The positive comes from Orders that comfortably beat expectations (+6%), driven by booming data-center demand (+40% organic order growth), which we don't think will be a surprise for anyone.  FY26 sales guidance was marginally upgraded which is also a positive.

Yet, we believe this will not be enough to boost the shares higher.  ABB is a fantastic company, with terrific products in the most hyped segment (AI Capex for datacenters/grid...). But it is simply too expensive (P/E 26 and 27 at 31.21x and 27.6x, respectively).
We maintain our negative stance on the stock and still see a 20% downside to fair value. 


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