Ericsson (ERIC) Stock Gets Price Target Cut at Canaccord

Canaccord lowered its price target on Ericsson (ERIC) stock to $7 from $8.50 on Wednesday.
By Annie Palmer ,

NEW YORK (TheStreet) -- Ericsson's  (ERIC) - Get Report price target was decreased to $7 from $8.50 at Canaccord on Wednesday. 

The firm maintained its "hold" rating on the Swedish networking and telecommunications company. Ericsson posted worse-than-expected earnings for the 2016 second quarter yesterday, which Canaccord said could be a result of a continued slowdown in mobile broadband infrastructure.

While Ericsson continues to roll out its 5G network, Canaccord said it will need to reduce operating expenses. The company recently announced restructuring that will take effect July 1 - a change that should lessen "overlap in product development and service delivery," the firm added. 

"With a simplified structure, we believe Ericsson could bring products and services to market more quickly and improve its cost structure," Canaccord said in an analyst note. 

Today, Ericsson's two most powerful shareholders, Investor AB and Industrivaerden AB reportedly agreed that the company needs a new CEO as the company's costs continue to rise, Bloomberg reports.

Shares of Ericsson are increasing by 2.8% to $7.28 in afternoon trading on Wednesday. 

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 has this to say about the recommendation:

We rate ERICSSON as a Hold with a ratings score of C+. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

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

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