NEW YORK (TheStreet) -- Shares of Ericsson (ERIC) are falling by 0.09% to $11.09 in Wednesday afternoon trading, as the Swedish telecommunications company is figuring out how to tackle the Nokia (NOK) - Alcatel Lucent (ALU) merger in order to stay ahead in the market, Bloomberg reports.
Ericsson so far has relied on smaller purchases, but the publication noted that there's a growing need by network providers to offer a more complete range of products.
"Ericsson can't seem to grow fast enough on the fixed side so scaling organically to compete isn't really possible," Mathias Lundberg, an analyst at Swedbank AB in Stockholm, told Bloomberg.
Nokia's $16.6 billion acquisition of Alcatel in April is set to surpass Ericsson in sales, Bloomberg added.
Next month, CEO Hans Vestberg plans to gather with his top managers to discuss plans on what the company can do to counter the Nokia-Alcatel deal.
TheStreet Ratings team rates ERICSSON as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ERICSSON (ERIC) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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 expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."