ABB's Electrification Segment Gains Momentum: Will This Continue?

ABB Ltd ABBNY is witnessing persistent strength in the Electrification segment driven by solid customer activities in major markets, including service and utilities. Positive momentum in the data center business has been driving market orders across the US and Germany. In the second quarter of 2025, the segment’s orders totaled $4.52 billion, up 9% year over year on a comparable basis.

The order backlog reached a record level of $8.69 billion compared with $7.55 billion reported at the end of the year-ago quarter. In the second quarter, the segment’s revenues totaled $4.33 billion, reflecting an increase of 11% year over year, on a comparable basis.

The Electrification segment is benefiting from the steady execution of its order backlog, particularly in medium voltage and power protection businesses. Improving customer activity in the short-cycle and system-related businesses and increased project wins across multiple divisions bode well. Also, its buyout of Siemens’ Wiring Accessories (March 2025) is anticipated to support the Electrification segment’s revenue growth going forward. 

ABBNY also expects to witness positive market response to its recently launched next-generation air circuit breaker, the SACE Emax 3. Equipped with sensing, intelligence and advanced algorithms, the first cybersecurity SL2-certified air circuit breaker is designed to boost energy security resilience of power systems across major infrastructure like airports, data centers, factories and hospitals.

Segment Performance of ABB's Peers

EnerSys’ ENS Energy Systems segment generated net sales of $399 million in fourth-quarter fiscal 2025, up 8% year over year. EnerSys’ Energy Systems segment’s revenues increased, on account of strength across data centers and recovery in the U.S. Communications market.  EnerSys derived 40.9% of its total revenues from this segment during the quarter.

Emerson Electric Co.’s EMR Software and Control Automation Solutions segment generated net sales of $1.42 billion in second-quarter fiscal 2025, up 7% year over year. The growth was supported by Emerson’s solid momentum in the AspenTech business and strength in the power and process markets. Emerson derived 32.1% of its total revenues from this segment during the quarter.

ABBNY’s Price Performance, Valuation and Estimates

Shares of ABB have gained 22% in the past six months compared with the industry’s growth of 16.4%.

From a valuation standpoint, ABBNY is trading at a forward price-to-earnings ratio of 25.07X, above the industry’s average of 24.53X. ABB carries a Value Score of C.

The Zacks Consensus Estimate for ABB’s 2025 earnings has increased 1.2% over the past 60 days.

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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