Ericsson (Buy, TP: SEK85.00) - Earnings momentum accelerating
Similar to Q2, we expect a positive mix-driven gross margin and FCF beat, with Q3e adj. EBITA 12% above post-Q2 Infront consensus, signalling accelerating earnings momentum in H2e and improving investor sentiment. The AT&T contract ramp-up appears to be on track, and we find the SEK10.6bn divestment of non-core iconectiv favourable, sharpening the business profile and increasing the potential for share buybacks in 2025e. We reiterate our BUY and have raised our target price to SEK84 (83).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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