ABB (Hold, TP: SEK330.00) - Improved supply chain boosts Q4e
We are above consensus on Q4e order intake, sales, and operating EBITA (by 1%, 4%, and 6%, respectively). We expect unchanged demand QOQ, but that supply chain improvements will benefit sales and earnings. We have raised our 2022–2024e operating EBITA by 1–3% due to a positive FX effect on the recent weakening of the USD. For 2023, we expect focus to be on the planned IPO of the E-mobility business and sale of the Power Conversion business. We believe the positive changes implemented by ABB are well understood by investors and see a neutral risk/reward. We reiterate our HOLD but have raised our target price to SEK330 (310).ABB specializes in power and automation technologies. Co. provides a broad range of products, systems, solutions and services that are designed to boost industrial productivity, increase power grid reliability, and enhance energy efficiency. Co.'s automation businesses serve a full range of industries with process optimization, control, measurement and protection applications. Co.'s power businesses focus on power transmission, distribution and power-plant automation, and support electric, gas and water utilities, as well as industrial and commercial customers.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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