ABB Kept at Hold as Berenberg Notes Rotork Takeover Offer, 'Broadly In-line' Q2 Results

07:03 AM EDT, 07/20/2026 (MT Newswires) -- Berenberg maintained its investment case for ABB (ABBN.SW, ABB.ST), noting the company's broadly expected second-quarter performance and recent takeover offer for industrial valve manufacturer Rotork (ROR.L). "ABB's Q226 results emphasised the continued strength in electrification markets as data centre orders once again grew at a triple-digit level, driving a 14% beat for order intake. However, this was not enough to offset investor concerns regarding the Rotork acquisition, with shares down on the day. The deal makes strategic sense, but ABB looks to have paid a premium, in our view. The results themselves were broadly in line, although the 12% organic revenue growth in the quarter and visibility from a record backlog contributed to an upgrade to FY26 guidance, while the margin outlook was maintained. We remain Hold-rated with a price target of CHF80," according to a Monday note. The research firm views the Swedish-Swiss engineering and technology company's $5.5 billion takeover proposal for Rotork as "strategically sound but expensive," adding the planned purchase bolsters ABB's competitive position. "We believe M&A remains a focus for ABB given its 1-2% inorganic growth target, which could raise questions about potential future acquisition prices. That said, synergies (mostly revenue-based) may reduce the deal multiple to mid-teens," the note said. On the earnings side, analysts noted management's upward revision of full-year 2026 comparable revenue growth guidance to low-double-digit to low-teens growth from high-single-digit to low-double-digit growth previously. This upgrade, paired with improved backlog visibility and "some margin improvements," prompted Berenberg to raise its 2026 and 2027 EPS forecasts by 2% and 3%, respectively.