Valuation downgrades may keep ABB under pressure amid weak orders

Weak order inflows, margin strain and prolonged QCO-related friction are prompting analysts to trim estimates and flag valuation risks for ABB

ABB had steady execution through Q2FY26, but order inflows remained weak and margins were under pressure. Analysts are cutting revenue and earnings estimates and further disappointments could lead to valuation downgrades. 

A 570 basis points year-on-year (Y-o-Y) decline in the Q2 gross margin was higher than the 340 basis points decline of operating profit margin to around 15.1 per cent. The net profit margin at 12.4 per cent is also hovering at the lower end of the 12-15 per cent range in which ABB historically operates. 

The motion and electrification segments registered 9-10 per cent growth on the back of