ABB shares scale fresh peak for second session; should you buy the stock at current levels?

ABB India share price BSE: ABB India shares surged to an all-time high on Thursday, February 22, for the second consecutive session after the large-cap technology firm announced its financial results and declared a dividend of Rs 23.8 per share on Tuesday.

The ABB India stock rose as much as 9.37 per cent to register a fresh record high of Rs 5,456.95 apiece on the BSE, rising for the third session. The counter's market capitalisation stood at Rs 1,15,098.03 crore, as per the BSE. The counter settled at Rs 5,431.5, up by Rs 442.2 or 8.86 per cent on BSE.  

ABB India share price target: Can you still ride the breakneck surge in the counter?

Being upbeat on the order outlook, Nomura has double-upgraded ABB India to buy from neutral. The brokerage has raised the target to Rs 5,740 from Rs 3,575 earlier, given the rising convergence between automation, electrification, and premiumisation.

A margin trajectory of 14.0–14.5 per cent appears sustainable. The counter is trading at nearly 53x CY25F EPS, the brokerage said.

Jefferies has also maintained a buy call on ABB with a revised target price of Rs 6,115 from Rs 6,085 earlier, translating to an upside potential of 22.5 per cent on the stock.

According to Jefferies, 4QCY23 EBITDA is lower than expectations given a 7 per cent revenue miss. However, order flow is up 35 per cent year-on-year (YoY) and provides strong revenue growth visibility.

Margins were flattish at 10 bps; however, it saw an improvement, but CY23 margins were up 303 bps YoY at 14.3 per cent, the brokerage added.

ABB India dividend

ABB India announced the final dividend of Rs 23.8 per share for the year ended December 31, 2023, subject to the approval of shareholders at the company’s 74th annual general meeting (AGM), scheduled to be held on May 11.

ABB India shares: Past performance

ABB India shares gave a return of over 50 per cent in the past year, sharply outperforming a 24 per cent rise in the headline Nifty50 index.

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