Canaccord Genuity reiterated its Hold rating on Telefonaktiebolaget LM Ericsson ERIC, lowering the price target to $7 from $8.50. The analysts reduced their 2016/2017 non-IFRS EPS estimates from $0.66/$0.71 to $0.44/$0.52.
Ericsson posted Q2 non-IFRS EPS of SEK0.83, below SEK1.06 consensus estimate, affected by a continued slowdown in mobile broadband infrastructure investment globally. Moreover, currency volatility in Brazil, Russia and the Middle East combined with the completion of 4G buildouts in developed markets negatively impacted carrier spending.
The analysts expect soft Network revenue trends through 2017 as 5G investments remain in early stages of development and global 4G spending likely declines over the next several years.
"While the ongoing execution on its SEK9B cost reduction program through 2017 should help, we anticipate a greater mix of professional services over the next two years will weigh on gross margins," said Canaccord.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.