What’s up with… Bell Canada, Ericsson, Orange Business

Morgan Stanley downgraded Ericsson to underweight, cutting price targets to SEK90 and $9, citing falling North American revenues and margin pressures. The bank expects flat market growth and declining margins through 2028, preferring Nokia. Ericsson shares fell over 3%.

LM Ericsson (ERIC) stock fell 3.7% to SEK 96.62 after Morgan Stanley downgraded it to Underweight, citing declining North American revenues and falling margins. The bank lowered its price targets and warned of potential earnings revisions due to headwinds in the mobile Radio Access Network equipment business. Ericsson's Q3 guidance also indicates a margin decline. Morgan Stanley prefers rival Nokia for its AI infrastructure exposure.

Morgan Stanley downgraded Ericsson (ERIC) to Underweight, lowering its price target to 90 SEK and $9 for ADRs, citing declining North American revenues and falling margins. Shares dropped over 3% in Stockholm. The bank expects flat mobile RAN market growth and margin declines through 2028, reducing 2027 EBIT and EPS estimates by 5% and 6%, respectively. Ericsson's stock trades at 16x earnings, above its 5-year average.

Morgan Stanley downgraded Ericsson to underweight, citing limited revenue growth potential and expected margin pressure. The bank forecasts a 1% annual gross margin decline through 2028, contrasting with consensus expectations. Ericsson's North America network revenue fell 5% in Q2. The bank prefers Nokia in the telecom equipment sector. Ericsson's stock is down 3.4%.

Morgan Stanley downgraded Ericsson (NASDAQ:ERIC) to Underweight, lowering its price target to $9.00. The firm expects flat mobile RAN market growth and margin pressure due to rising input costs. Ericsson's Q2 revenues declined 5% YoY in North America, with Q3 guidance showing a 100 bps margin decline. Morgan Stanley reduced 2027 EBIT and EPS estimates by 5% and 6%, respectively. Ericsson's P/E is 11.19, with a PEG ratio of 0.32, suggesting potential undervaluation.

Ericsson and VodafoneThree launched an upgraded 5G Core network, powered by Ericsson's dual-mode 5G Core, for VodafoneThree's 28.6 million customers. The network offers faster speeds, guaranteed minimum download speeds, and dedicated network slices for consumers and businesses. The project is part of an SEK 12.5 billion partnership and aims to support growing data demands with a capacity of 9 Tbps.