ABB Ltd Just Beat EPS By 18%: Here's What Analysts Think Will Happen Next
It's been a good week for ABB Ltd (VTX:ABBN) shareholders, because the company has just released its latest first-quarter results, and the shares gained 4.8% to CHF42.20. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at US$7.9b, statutory earnings beat expectations by a notable 18%, coming in at US$0.60 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
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Taking into account the latest results, the current consensus from ABB's 24 analysts is for revenues of US$34.6b in 2025. This would reflect a modest 5.0% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 6.3% to US$2.40. In the lead-up to this report, the analysts had been modelling revenues of US$34.4b and earnings per share (EPS) of US$2.38 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
See our latest analysis for ABB
The analysts reconfirmed their price target of CHF47.03, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic ABB analyst has a price target of CHF59.30 per share, while the most pessimistic values it at CHF34.02. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that ABB's rate of growth is expected to accelerate meaningfully, with the forecast 6.8% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 5.0% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that ABB is expected to grow much faster than its industry.
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on ABB. Long-term earnings power is much more important than next year's profits. We have forecasts for ABB going out to 2027, and you can see them free on our platform here.
You can also view our analysis of ABB's balance sheet, and whether we think ABB is carrying too much debt, for free on our platform here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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