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Here's Why Ericsson (ERIC) is a Promising Pick for Investors

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Shares of Ericsson (ERIC - Free Report) have returned 96.3% in the past year compared with 91.5% growth of the industry. Currently, the stock carries a Zacks Rank #2 (Buy) and has a VGM Score of B.



This Sweden-based company delivered a trailing four-quarter earnings surprise of 24.1%, on average. The Zacks Consensus Estimate for its current-year earnings has been revised 9.7% upward over the past 60 days.

Growth Drivers

Ericsson intends to invest in strengthening its portfolio and expanding global footprint. It is committed to its 2022 target as a milestone toward long-term EBITA goal of 15-18%.

The company is benefiting from accelerated 5G deployments in North-East Asia, North America and Europe. Ericsson currently has 134 commercial 5G agreements with communications service providers (of which 76 are publicly announced) and includes 83 live 5G networks in 41 countries. Also, the acquisition of Cradlepoint has strengthened its ability to grow in the 5G enterprise market.

Investments in research and development (R&D) have established Ericsson as a leader in 5G. The company’s patent licensing business continues to perform well on the back of a strong intellectual property rights portfolio. Ericsson has accelerated its R&D investments in Digital Services to capture further opportunities. The company is seeing a healthy momentum in its business, based on the strategy to increase its investments for technology leadership.

The company continues to focus on its restructuring plan to cut costs. Ericsson’s ‘cost and efficiency program’ has been devised to generate higher cost savings. It is focused on structural changes that will generate lasting efficiency gains and boost cost competitiveness.

Ericsson is also focused on stabilizing its IT, cloud and project portfolio, and re-establishing profitability in managed services by handling existing contracts while investing in artificial intelligence and automation.

Other Key Choices

Some other top-ranked stocks in the broader industry are Aviat Networks (AVNW - Free Report) , Plantronics and Ubiquiti (UI - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Aviat Networks delivered a trailing four-quarter earnings surprise of 61.7%, on average.

Plantronics delivered a trailing four-quarter earnings surprise of 560.4%, on average.

Ubiquiti delivered a trailing four-quarter earnings surprise of 37.1%, on average.

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Ericsson (ERIC) - free report >>

Aviat Networks, Inc. (AVNW) - free report >>

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