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Yield Enhancement

Single BRC: high expectations for ABB

Friday, 8 October 2021 Reading time : 3 minutes

In recent weeks, the Swiss-Swedish industrial group ABB has repeatedly appeared in the media; at the end of September, it announced an agreement with Peric Hydrogen Technologies aimed at increasing efficiency in the production of hydrogen. This is intended to reduce costs and accelerate widespread use.

Recently, however, Goldman Sachs raised its price target to 48 francs and maintains its buy recommendation - currently ABB is trading at just 30 francs. Achieving the price target would represent an increase in the share price of over 50%.

Not all analysts are quite so optimistic; the average published target price is CHF 34.50. ZKB Equity Research also assumes that the share will perform in line with the market ("market-weighted").

The stocks implied volatility of 22.7% (6 months) is above the average of the SMI heavyweights, which leads to more attractive coupons for yield enhancement products.

For investors who - like the market consensus - do not expect outperformance, our single-name BRC can be a fit:

Callable Barrier Reverse Convertible on ABB (CHF / EUR)

Or as Worst-Of with further blue chips from Switzerland:

Callable Barrier Reverse Convertible on ABB, Novartis, Givaudan and Swisscom (CHF)

  • 11%* Coupon p.a.
  • 70%* Barrier
  • 18 months Maturity
  • Subscription period ends on October 14, 2021
  • Termsheet

*indicative

Also interesting: our leverage products on ABB!

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