ABB recently disclosed that it will energize the European Spallation Source (‘ESS’) research center that is currently under development in Lund, Sweden. However, following this news release, shares of the company fell around 1.5%, probably on broader market concerns.
ABB will offer a complete distribution substation solution to the research center that is expected to be a world leading facility for materials research using neutrons, post completion. ABB, in particularly, will monitor the project execution of the 20-kilovolt and 400-volt grid intended for supplying power to the facility. It comprises designing, installation and commissioning of the primary and distribution substations.
ESS research center is designed to facilitate the study and creation of materials for usage across varied industries like pharmaceutical drugs, aerospace, manufacturing, biotechnology, plastics and information technologies. Notably, ESS is a partnership of European nations and its main motive behind this development is to attain the position of the world’s first sustainable research facility. To aid the ESS facility in attaining this, ABB will deliver the medium-voltage switchgear dry-type transformers and its MicroSCADA system that will check the center on a real-time basis along with aiding operators in fixing any faults or disturbances.
We believe the above-mentioned deal is at par with ABB’s Next Level Strategy. Given the current industry trends, the company expects to gain from high investments in power transmission projects in mature and emerging markets as well as ongoing investments toward maintenance of ageing electric infrastructure. We expect ABB to continue winning such lucrative awards in the future, thereby ensuring long-term growth.
ABB currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include Dycom Industries Inc. DY, Jiangsu Expressway Co. Ltd. JEXYY and Zhejiang Expressway Co. Ltd. ZHEXY. While Dycom Industries sports a Zacks Rank #1 (Strong Buy), Jiangsu Expressway and Zhejiang Expressway carry a Zacks Rank #2 (Buy).