MS downgrades Ericsson on margin pressures, lack of AI exposure

Nokia Oyj

22/09/2026 08:36

** Morgan Stanley downgrades Swedish telecom equipment maker Ericsson ERICb.ST to "underweight" from "equal-weight", citing pressures from shrinking North American revenue and falling margins
** The broker questions the recent stock rally, noting Ericsson lacks direct AI exposure unlike its peers, and predicts lower earnings going forward
** "Telco operators remain very conservative on their mobile capex outlays," MS adds, projecting a flat Radio Access Network market, the system connecting devices to networks
** It expects higher input costs for semiconductors to further squeeze profitability, reducing its PT for Ericsson by 5% to SEK 90
** MS prefers rival Nokia NOKIA.HE, noting Ericsson trades at a higher P/E ratio, a key valuation metric, and remains mostly exposed to telecom capex plans
** Out of 22 analysts that cover Ericsson, six rate it "strong buy"/"buy", eight "hold" and eight "sell"/strong sell", according to LSEG data

(Reporting by Marta Frackowiak)
((marta.frackowiak@thomsonreuters.com))