Ericsson (Buy, TP: SEK80.00) - Time to revisit risk/reward
We have raised our revenue estimates based on an updated view on India and slightly more front-end-loaded cost reductions. Given the closing of the DPA breach case and no new findings regarding Iraq, we see a gradual reduction in the governance discount as likely. With a largely de-risked Q1 and Ericsson trading at an EV/EBITDA of 3x for 2024e, we have upgraded to BUY (HOLD) and raised our target price to SEK80 (63).Ericsson provides communications technology and services. Co.'s services, software and infrastructure – especially in mobility, broadband and the cloud – enable the telecom industry and other sectors to do business, increase efficiency, improve the user experience and capture new opportunities. Co. has more than 110,000 professionals and customers in more than 180 countries. Co. provides support for networks with more than 2.5 billion subscribers. Co.'s core business areas are called Radio, Core and Transmission and Telecom Services. Co. divides its operations into three business segments: Networks, Global Services and Support Solutions.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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