Ericsson stock price target raised to $11 from $8 at CFRA

Investing.com - CFRA has raised its price target on Ericsson (NASDAQ:ERIC) to $11.00 from $8.00 while maintaining a Hold rating on the stock. The stock, currently trading at $9.85, has shown remarkable momentum with a 15.34% gain in the past week, approaching its 52-week high of $9.87. According to InvestingPro analysis, the company appears slightly undervalued based on its Fair Value metrics.

The research firm cited Ericsson’s entry into a "structurally stronger phase" following years of cost optimization, portfolio rationalization, and operational streamlining. CFRA revised its 2025 EPS forecast to SEK7.00 from SEK6.00 while maintaining its 2026 estimate at SEK6.20. This outlook aligns with Ericsson’s solid fundamentals, reflected in its Good Financial Health Score of 2.74 on InvestingPro.

The new price target applies an EV/EBITDA multiple of 6.6x to CFRA’s 2025 EPS estimate, which aligns with Ericsson’s five-year average forward EV/EBITDA.

CFRA believes Ericsson’s Networks segment will continue to provide earnings stability, while the Cloud Software & Services segment offers gradual upside potential from portfolio optimization. Management’s recent commentary about "margin at a new long-term level" in Q3 2025 demonstrates successful execution of efficiency initiatives.

Despite these positive developments, CFRA maintained its Hold rating, citing persistent foreign exchange volatility and ongoing normalization in North America’s 5G investments as factors that may limit near-term momentum. With a P/E ratio of 12.54 and an EV/EBITDA of 11.82, investors seeking deeper insights can access comprehensive valuation metrics and 10+ additional ProTips through InvestingPro’s detailed research reports.

In other recent news, Ericsson reported impressive third-quarter earnings for 2025, surpassing analyst expectations. The company achieved an earnings per share (EPS) of $3.33, significantly higher than the forecasted $2.33, marking a 42.92% surprise. Ericsson’s revenue also exceeded projections, reaching $56.2 billion compared to the anticipated $55.9 billion. In addition to strong financial results, Ericsson announced a $3 billion partnership with Export Development Canada (EDC) to enhance Canadian research and development over the next three years. This collaboration aims to bolster domestic supply chains and accelerate advancements in technologies such as 5G, Cloud RAN, artificial intelligence, and quantum innovation. These recent developments highlight Ericsson’s strategic focus on innovation and expansion in the Canadian market.

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