Ericsson (ERIC) Stock Gains on CEO Vestberg Departure

Ericsson (ERIC) CEO Hans Vestberg has stepped down from his position following intense shareholder pressure.
By Rachel Aldrich ,

NEW YORK (TheStreet) -- Shares of Ericsson (ERIC) - Get Report  are climbing 2.17% to $7.52 in pre-market trade this morning after the company announced that CEO Hans Vestberg is resigning from his position effective immediately.

Executive VP and CFO Jan Frykhammar will take Vestberg's place until a replacement can be found, according to a company statement.

"In the current environment and as the company accelerates its strategic execution, the board of directors has decided that the time is right for a new leader to drive the next phase in Ericsson's development," said Chairman of the Board Leif Johansson.

Analysts at JPMorgan said that Vestberg helped propel the company from a Networks to a Networks and Services organization. However, "that strategy seems to have run its course," the firm added.

"Most important is improving Ericsson's gross margin which is well below that of its peers," JPMorgan said.

Ericsson is a Swedish telecommunications operator.

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

TheStreet Ratings rates this stock as a "hold" with a ratings score of C+.

The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and notable return on equity. However, TheStreet Ratings finds weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.

You can view the full analysis from the report here: ERIC

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