The price target increases from 24 to 26 Swiss francs, representing a potential of a little over two courses francs in Zurich where the action takes ABB 2.6% this morning.
While the quarterly sales which expressed the manufacturer of electrical and industrial automation have proved robust.
But the decision analysts based rather on the fact that ABB should, according to them, reach the end of a cycle where it has repeatedly missed market expectations. "We believe that the underperformance of the ABB share for the twelve months was the result of high expectations and persistent in the Power industry, where competitors are emerging in number, and that this led to ignore the positive trends of Automation" , said the research note.
Now, expectations for Power lines (nearly 16%) are classified as "reasonable", while the backlog has grown. In Automation, an acceleration of growth is still expected. Finally, the overall ability of ABB to play on its price has significantly improved.
After $ 1.21 in 2010, Credit Suisse has raised its forecast for earnings per share from 1.47 to $ 1.51 for 2011 and 1.67 to $ 1.80 for 2012. ABB maintains its accounts in U.S. dollars.
Certainly, at 17.1 times its earnings in 2011 and 14.4 times those of 2012, ABB action seems expensive, but it follows in particular the future state of balance: a net positive cash position of $ 5 billion is actually expected in 2012.
In addition, the cyclical nature of this value is too late. And the title does pays 10.6 times operating profit expected for 2012, a level in line with its long-term average while forecasting increases are expected.