Ericsson (NASDAQ:ERIC) Shares Gap Down – Here’s What Happened

Ericsson (NASDAQ:ERIC)’s share price gapped down prior to trading on Tuesday . The stock had previously closed at $11.72, but opened at $10.51. Ericsson shares last traded at $10.3150, with a volume of 7,201,071 shares changing hands.

Ericsson News Roundup

Here are the key news stories impacting Ericsson this week:

• Neutral Sentiment: Ericsson reported Q2 adjusted earnings of $0.13 per share, matching Wall Street expectations, which suggests core profitability held up better than feared. Ericsson earnings report and conference call
• Positive Sentiment: Margins in key businesses showed resilience, and the company’s return on equity remained strong, which may help limit downside if investors focus on operational efficiency. Zacks article on margin resilience
• Neutral Sentiment: Ericsson also continued its share repurchase program, buying back 2.5 million shares in July, which signals management confidence but is unlikely to offset the earnings reaction on its own. Share buyback announcement
• Negative Sentiment: Revenue came in below expectations as lower IPR licensing sales and weak Networks/Enterprise performance weighed on results, raising concerns about demand trends. MarketWatch article on margin pressure
• Negative Sentiment: Management warned that Q3 Networks gross margin could face additional pressure from higher rollout volumes and rising component costs, including memory-chip inflation, which is driving the stock lower. RTT News article on weak Q2 and cautious Q3 view

Analysts Set New Price Targets

Several equities research analysts recently commented on ERIC shares. Weiss Ratings reiterated a “buy (b)” rating on shares of Ericsson in a research note on Tuesday, June 2nd. Wall Street Zen downgraded shares of Ericsson from a “buy” rating to a “hold” rating in a research note on Saturday, April 25th. Finally, Citigroup reaffirmed a “neutral” rating on shares of Ericsson in a report on Tuesday, April 28th. One investment analyst has rated the stock with a Buy rating, six have assigned a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat, the stock has an average rating of “Reduce” and an average target price of $11.00.

Ericsson Stock Performance

The company has a market cap of $34.23 billion, a PE ratio of 12.88, a PEG ratio of 1.99 and a beta of 0.93. The stock has a 50 day simple moving average of $12.09 and a two-hundred day simple moving average of $11.33. The company has a debt-to-equity ratio of 0.21, a current ratio of 1.12 and a quick ratio of 0.93.

Ericsson (NASDAQ:ERIC) last announced its earnings results on Tuesday, July 14th. The communications equipment provider reported $0.13 earnings per share (EPS) for the quarter, hitting analysts’ consensus estimates of $0.13. Ericsson had a net margin of 10.80% and a return on equity of 22.17%. Equities analysts predict that Ericsson will post 0.64 EPS for the current year.

Institutional Trading of Ericsson

A number of large investors have recently bought and sold shares of ERIC. Public Employees Retirement System of Ohio grew its position in Ericsson by 26.3% during the 1st quarter. Public Employees Retirement System of Ohio now owns 1,418,076 shares of the communications equipment provider’s stock worth $15,982,000 after purchasing an additional 295,185 shares during the last quarter. Bank of New York Mellon Corp raised its holdings in shares of Ericsson by 8.5% in the first quarter. Bank of New York Mellon Corp now owns 160,581 shares of the communications equipment provider’s stock valued at $1,810,000 after buying an additional 12,534 shares during the last quarter. Advisors Preferred LLC purchased a new stake in shares of Ericsson in the first quarter valued at about $493,000. Defiance ETFs LLC acquired a new stake in shares of Ericsson during the fourth quarter worth about $13,766,000. Finally, Russell Investments Group Ltd. boosted its stake in shares of Ericsson by 19.1% during the fourth quarter. Russell Investments Group Ltd. now owns 1,903,298 shares of the communications equipment provider’s stock worth $18,603,000 after buying an additional 304,974 shares during the period. Institutional investors and hedge funds own 7.99% of the company’s stock.

Ericsson Company Profile

Ericsson AB is a Swedish multinational telecommunications equipment and services company headquartered in Stockholm. Founded in 1876 by Lars Magnus Ericsson, the company designs, develops and sells infrastructure, software and services that enable mobile and fixed-line networks worldwide. Ericsson serves a global customer base that includes mobile network operators, enterprise customers and public-sector organizations across Europe, the Americas, Asia-Pacific, the Middle East and Africa.

The company’s core activities center on building and modernizing network infrastructure, with a particular focus on radio access networks (RAN), core network software, cloud-native solutions and network management systems.