ABB's Process Automation Growth Picks Up: A Sign of More Upside?

ABB Ltd’s ABBNY Process Automation segment continues to play an important role in the its overall growth. Strength in the marine, ports and energy industries is aiding the segment’s performance. In the first quarter of 2025, orders from the segment increased 23% and revenues rose 5% on a year-over-year basis.

Strong project activity in several areas like passenger vessels, port electrification and industrial automation helped drive momentum. Customers continue to invest in advanced automation platforms to improve efficiency and operational control, which bodes well for the segment. It is also benefiting from follow-on orders and growing customer interest in smart and connected solutions.

The segment’s order backlog was $8.1 billion exiting the first quarter, higher than $7.4 billion reported in the fourth quarter of 2024. This strong backlog level reflects ABBNY’s steady execution on large projects and growing traction in digital automation platforms. The adoption of automation technologies and a digital automation platform is also helping the company grow its recurring revenue and strengthen long-term customer relationships.

However, demand remains muted in the chemicals, pulp & paper, and mining industries. Global uncertainty particularly related to trade policies and slower investment decisions may also affect the pace of large capital projects. Despite these risks, the Process Automation segment remains well-positioned to deliver growth with a strong backlog level, solid momentum in core industries and rising adoption of digital automation technologies.

Segment Snapshot of ABB's Peers

Among its major peers, Eaton Corporation plc’s ETN Electrical Americas segment reported net sales of $3.01 billion in the first quarter of 2025, up 11.9% year over year. Eaton generated 47% of its total sales from this segment in the quarter. Eaton’s backlog, with orders, at the end of the first-quarter, increased 6% in the Electrical Americas segment.

Emerson Electric Co.’s EMR Software and Control Automation Solutions segment generated net sales of $1.42 billion in the second-quarter fiscal 2025, up 7% year over year. This was driven by robust growth across AspenTech and strength in the power and process end 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 9.5% in the past six months compared with the industry’s growth of 2.4%.

From a valuation standpoint, ABBNY is trading at a forward price-to-earnings ratio of 23.20X, above the industry’s average of 22.71X. ABB carries a Value Score of C.

The Zacks Consensus Estimate for ABB’s second-quarter 2025 earnings has declined over the past 60 days.

The company currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research