NEW YORK (TheStreet) -- Shares of Ericsson (ERIC) - Get Report were declining on heavy trading volume mid-Tuesday afternoon as the stock's rating was reduced to "neutral" from "overweight" at JPMorgan, Barron's reports.
The firm has a $5.40 price target on shares of the Sweden-based telecom company, according to the Fly.
JPMorgan said that "cost cutting is not helping" Ericsson and the company needs to adopt a new strategy following the appointment of its new CEO Jan Frykhammar in July.
The firm noted that while Ericsson does have a cost problem, it also "has a mix problem that is much harder to correct without major strategic change."
"Collapse in core networks, poor management of product mix in a market where software is the only segment that is clearly profitable and ongoing macro-led declines in markets such as Russia, the Middle East and Brazil have added to woes of lack of capacity sales," the firm added.
JPMorgan said that Ericsson won't become a better stock based on cyclical recovery and the potential of its 5G business alone, according to Barron's.
Last week, Ericsson reported downbeat results for the 2016 third quarter, with revenue sliding 14% year-over-year.
More than 10.81 million shares of Ericsson have traded hands so far today vs. the 30-day average volume of 9.25 million shares.
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 rated 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, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow.
You can view the full analysis from the report here: ERIC