The beginning of earnings season got off to a great start with Ericsson’s first-quarter report. The market is ecstatic: the stock is up by 7%.
Renowned financier Christer Gardell, whose Cevian Capital is a major shareholder in the company, highlights the margin.
“In a time of global uncertainty, Ericsson stands out with its strong margin. All business areas are exceeding market expectations and demonstrating that a focus on cost efficiency is yielding results. Even amidst the current uncertainty surrounding tariffs and macro developments, Ericsson stands strong with a leading market position benefiting from continued robust growth in mobile data usage,” he told Placera.
Handelsbanken analyst Daniel Djurberg also points out the gross margin.
“It’s a strong report that shows it is indeed possible to achieve a fairly good gross margin in the Networks business,” he told Placera.
Citi believes the stock has a reasonable discount
Analytical firm Citi’s analyst Andrew Gardiner commented after the report:
“We view these results as positive, particularly given the weak investor sentiment towards Ericsson, but note trade uncertainties and currency headwinds.”
Citi has a neutral recommendation on the stock with a target price of 90 SEK, corresponding to a forward-looking P/E of 13 for the expected earnings in 2026. This represents a 15% discount compared to the company’s long-term average valuation, according to the analytical firm.
“Such a discount is significant, but we believe it is reasonable given the recent margin pressure and allegations of improprieties and related government investigations into Ericsson’s past actions,” Andrew Gardiner wrote.
| Ericsson, mdkr | Q1-2025 | Konsensus | Förändring mot konsensus | Q1-2024 | Förändring |
| — | — | — | — | — | — |
| Nettoomsättning | 55.0 | 55.5 | -0.9% | 53.3 | 3.2% |
| Ebita | 6.7 | – | – | 4.9 | 36.7% |
| Ebita-marginal | 12.2% | – | – | 9.2% | – |
| Justerat ebita | 6.9 | 4.9 | 40.8% | 5.1 | 35.3% |
| Justerad ebita-marginal | 12.5% | 8.8% | – | 9.6% | – |
| Rörelseresultat | 5.9 | – | – | 4.1 | 43.9% |
| Rörelsemarginal | 10.7% | – | – | 7.7% | – |
| Justerat rörelseresultat | 6.2 | – | – | 4.3 | 44.2% |
| Justerad rörelsemarginal | 11.3% | – | – | 8.1% | – |
| Nettoresultat | 4.2 | – | – | 2.6 | 61.5% |
| Resultat per aktie, kronor | 1.24 | – | – | 0.77 | 61.0% |
Consensus data from Bloomberg
In conclusion, Ericsson’s strong performance in the first quarter has impressed investors and analysts alike. Despite challenges in the global market, the company’s focus on cost efficiency and strong market position have set it apart. With a reasonable discount on the stock, analysts are optimistic about the company’s future prospects.