ABB (SWX:ABBN) Stock Faces Rich Valuation As Margin Improvement Meets Expectations

ABB (SWX:ABBN) has posted Q2 2026 results with revenue of US$9.5b and basic EPS of US$0.66, set against trailing 12 month revenue of US$35.1b and EPS of US$2.69, while earnings grew 25.5% over the past year. The company has seen revenue move from US$30.8b to US$35.1b and EPS from US$2.12 to US$2.69 over the last five reported trailing periods, giving investors a clear line of sight on how top line and per share earnings have tracked into the current quarter. With net profit margin at 13.9%, up from 12.7% a year earlier, ABB’s latest print puts profitability at the center of how this earnings season update is likely to be read.

See our full analysis for ABB.

With the quarterly scorecard on the table, the next step is to see how these numbers line up against the widely held narratives around ABB’s growth prospects, risk profile and long term earnings power.

See what the community is saying about ABB

ABB earnings trend over the last six quarters

• Across the last six reported quarters, ABB's revenue moved from US$7.4b in Q1 2025 to US$9.5b in Q2 2026, while basic EPS moved from US$0.57 to US$0.66 over the same window.
• Consensus narrative often points to strong electrification and automation demand as drivers of multi year revenue visibility, and the step up from US$7.4b to the current US$9.5b gives some support to that, although:
  • EPS has not moved in a straight line, with Q1 2026 at US$0.74 compared with US$0.66 in Q2 2026, which reminds you that short term profitability can be bumpy even when revenue is higher.
  • Trailing basic EPS of US$2.69 and trailing revenue of US$35.1b sit above the earlier trailing figures in 2025, which is consistent with the idea of earnings momentum that analysts reference in their medium term assumptions.

Margins and profitability in the ABB story

• ABB's trailing net profit margin is 13.9% on US$35.1b of revenue and US$4.9b of net income, compared with 12.7% a year earlier, which means more of each sales dollar is currently dropping through to profit.
• Supporters of the bullish view argue that a record order pipeline and more software and services could keep improving profitability, and the move from a trailing net income of US$3.8b in early 2025 to US$4.9b in Q2 2026 lines up with that, but:
  • The margin improvement to 13.9% is meaningful, yet the bearish narrative that talks about pricing pressure and competition is not disproven, because quarterly net income has hovered in a fairly tight range around US$1.2b to US$1.3b in recent periods rather than breaking sharply higher.
  • Both bullish and bearish camps refer to margins in the 14% range over the next few years, and the current 13.9% sits very close to that, so the latest numbers largely reflect those expectations rather than stepping far ahead of them.

For readers tracking whether recent margin gains really back up the optimistic case on ABB, it is worth seeing how bulls connect these Q2 figures to their longer term narrative 🐂 ABB Bull Case

ABB valuation premium versus earnings profile

• At a P/E of 36.3x and a share price of US$79.20, ABB trades above both the European Electrical industry average of roughly 27x and a peer average of about 30.6x, while the stated DCF fair value of US$58.44 sits below the current price.
• Bears highlight that earnings are forecast to grow about 8.5% per year, slightly below the 10.8% forecast for the Swiss market, and argue that paying 36.3x earnings plus a premium to US$58.44 DCF fair value looks demanding when:
  • The same data describing a 25.5% earnings increase over the last year also notes a five year earnings growth rate of 9.1% per year, which is closer to the mid single digit to high single digit growth the cautious narrative uses in its assumptions.
  • With earnings growth expectations of roughly 8.5% per year and revenue growth around 9.5% per year, the gap between ABB's P/E and peer multiples becomes a key focus for anyone weighing how much to pay for that growth profile.

Skeptical investors who worry ABB's rich multiples leave little room for slower growth may want to see how the cautious case frames these same numbers 🐻 ABB Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for ABB on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

If ABB's latest results and the valuation debate leave you undecided, now is the time to stress test the numbers yourself, compare the optimism around its prospects, and then review the 3 key rewards.

See What Else Is Out There Beyond ABB

ABB's rich 36.3x P/E multiple, alongside earnings forecasts that sit close to market levels, raises questions about how much upside is left at this valuation.

If you are worried about paying up for ABB's current earnings profile, move quickly to assess alternatives with stronger value appeal through the 224 high quality undervalued stocks.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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