ABB Ltd (VTX:ABBN) shareholders are probably feeling a little disappointed, since its shares fell 9.6% to CHF68.92 in the week after its latest third-quarter results. It looks like a pretty bad result, all things considered. Although revenues of US$9.7b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 55% to hit US$0.65 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for ABB from 23 analysts is for revenues of US$43.0b in 2027. If met, it would imply a meaningful 16% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 29% to US$3.60. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$42.6b and earnings per share (EPS) of US$3.55 in 2027. 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.
Check out our latest analysis for ABB
It will come as no surprise then, to learn that the consensus price target is largely unchanged at CHF82.03. 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 CHF95.65 per share, while the most pessimistic values it at CHF66.35. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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 13% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 3.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that ABB is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is 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 estimates - from multiple ABB analysts - going out to 2028, and you can see them free on our platform here.
Even so, be aware that ABB is showing 1 warning sign in our investment analysis , you should know about...
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