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ABB Shares Decline 24.1% in 6 Months: What's Hurting It?

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ABB Ltd (ABB - Free Report) has been struggling with persistent supply-chain constraints and raw material cost inflation. Foreign-currency woes are also hurting its business. Due to these headwinds, shares of ABB have lost 24.1% in the past six months compared with the industry’s decrease of 15.4%.

Supply-chain disruptions, primarily due to semiconductor shortages are dwindling ABB’s volumes. Its Robotics & Discrete Automation segment is also being affected by supply-chain constraints. Revenues in the segment declined 13% year over year in the first half of 2022. Lockdowns in China are also hurting ABB’s operations.

ABB’s bottom line is being affected by cost inflation in commodities, freight and labor. Due to the ongoing war tensions between Russia and Ukraine, ABB intends to exit the Russian market. As a result, it anticipates a charge of $57 million as income from operations. Also, ABB’s high capital expenditures (totaled $338 million in the first half of 2022) might weigh on its profitability in the quarters ahead.

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ABB’s presence across diverse regions exposes it to various environmental laws and regulations in its operating countries. Adverse foreign-currency movements had an impact of 7% each on reported orders and revenues in the second quarter of 2022. Foreign currency woes also induced the stock’s decline.

Zacks Rank and Stocks to Consider

ABB currently carries a Zacks Rank #4 (Sell)

Some better-ranked companies from the Industrial Products sector are discussed below:

RBC Bearings Incorporated presently sports a Zacks Rank #1 (Strong Buy). ROLL delivered a trailing four-quarter earnings surprise of 9.4%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.

ROLL’s earnings estimates have increased 32.7% for fiscal 2023 (ending March 2023) in the past 60 days. Its shares have gained 15.5% in the past six months.

Valmont Industries, Inc. (VMI - Free Report) presently has a Zacks Rank #2 (Buy). VMI’s earnings surprise in the last four quarters was 13.7%, on average.

In the past 60 days, Valmont’s earnings estimates have increased 2.7% for 2022. The stock has rallied 7.9% in the past six months.

Greif, Inc. (GEF - Free Report) presently has a Zacks Rank of 2. GEF delivered a trailing four-quarter earnings surprise of 22.4%, on average.

GEF’s earnings estimates have increased 4.6% for fiscal 2022 (ending October 2022) in the past 60 days. Its shares have risen 2.2% in the past six months.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Valmont Industries, Inc. (VMI) - free report >>

ABB Ltd (ABB) - free report >>

Greif, Inc. (GEF) - free report >>

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