YASKY - ABB Posts A Decent Quarter But Questions Remain On The Self-Improvement Plan
- ABB delivered its fourth straight beat on margins and also beat expectations on revenue and orders.
- Guidance was a little conservative, but most markets should see improvement in 2021 (non-resi buildings and oil/gas being two notable exceptions).
- Management has credible targets for improving margins, but selling some very high-margin units will create headwinds, and the company's digital strategy remains uninspiring.
- Low-to-mid single-digit revenue growth and improving FCF margins can still drive a high single-digit total annualized return, but the upside is increasingly tied to delivery on the restructuring plan.
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ABB Posts A Decent Quarter, But Questions Remain On The Self-Improvement Plan