Ericsson Stock Forecast: The Headwind of Huawei Is A Tailwind For Ericsson

motek 1The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.

Summary

  • Ericsson’s stock has a price return of 32% since my last buy recommendation. I’m again reiterating this 5G networking-centric stock as a buy.
  • The new U.S. sanctions are a strong headwind for Huawei. Huawei’s problems are to the benefit of Ericsson’s 5G infrastructure deployment business.
  • Huawei’s affordable 5G hardware and software solutions will lose current and future customers due to U.S. government’s threat of severe punishments against Huawei/ZTE equipment buyers.
  • Proof of the ostracization of Huawei is that German firm Deutsche Telekom and Bell Canada has chosen Ericsson for their high-profile 5G infrastructure deployment contracts.
  • Ericsson will only have to contend with Nokia with it comes to 5G deployment on non-China markets. Less competition is always welcome.

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Ericsson Stock Forecast: Divestment of Underperforming Subsidiaries Will Allow Ericsson To Focus More On Its Core Business

motek 1  The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology  – Senior Analyst at I Know First

Ericsson Stock Forecast

Summary:

  • Networking leader LM Ericsson is worth adding to your long-term portfolio. Much of the world still needs better 4G LTE infrastructures.
  • The company’s recent move to sell its power modules subsidiary to Flex is a good sign. Ericsson now has more cash to fortify its core networking business.
  • A move to reduce a company’s diversified business to focus on core products can often lead to better topline and bottomline performance.
  • Ericsson is also looking to sell its large broadcast and media services subsidiary. Selling underperforming subsidiaries is always commendable.
  • ERIC has a bullish one-year algorithmic forecast from I Know First.

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