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AlphaValue/Baader Europe on Thursday upgraded Swedish telecommunications company Ericsson (ERIC-A.ST, ERIC-B.ST, ERIBR.HE) to buy from add and decreased its price target to 147 kronor from 154 kronor.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www..com/contact-us)
Ericsson's (ERIC-B.ST, ERIC-A.ST, ERIBR.HE) first-quarter profits declined year over year, pressured by restructuring expenses and adverse currency shifts, according to a Friday release.The telecommunications group's attributable net income for the three months ended March 31 stood at 888 million kronor, down from 4.15 billion kronor a year ago and the FactSet-compiled estimate of 3.57 billion kronor. EPS moved to 0.27 krona from 1.24 kronor.While reported net sales declined to 49.33 billion kronor from 55.03 billion, the company achieved 6% year-over-year organic growth, reflecting strength across all business segments. Analysts polled by FactSet expected 50.92 billion kronor in sales.For the three months, Ericsson's adjusted gross margin moderated to 48.1% from 48.5%, while reported gross margin came in at 47.2%, against the previous 48.2%. The group noted that the cloud software and services division saw margin expansion, while networks saw a slight reduction in margins."Our multi-year investments in building a resilient, [diversified] supply chain have enabled us to deliver consistently for customers amidst geopolitical and macroeconomic uncertainties. We are facing increasing input costs, especially in semiconductors, caused in part by AI demand. Our ambition is to offset these challenges, by working closely with customers and suppliers, and through product substitution and efficiency actions," Chief Executive Officer and President Börje Ekholm said, adding that the company's focus on enterprise and mission-critical segments bolsters long-term growth momentum even amid expectations of a "flattish" radio access network market.Concurrently, Ericsson plans to initiate a share buyback program worth 15 billion kronor, aimed at distributing excess liquidity and fulfilling obligations under its share-based incentive plans. The repurchase program will run from April 23, 2026, to March 31, 2027, with repurchases of Class B shares to be executed by an independent firm. The company will limit acquisitions to 10% of total issued shares and intends to propose the cancellation of all shares not required for incentive programs.Ericsson shares gained over 1% in Stockholm and marginally in Helsinki in early afternoon trade on Friday.
