Opinions
Paul Harris, CFA
Ericsson LM Telephone
ERIC-Q
COMMENT
Jul 21, 2020
Stock price when the opinion was issued
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Along with Nokia, an alternative to Huawei. Just rolled out 5G in Slovenia. Tons of investment opportunity in the sector. Yield is 0.64%. (Analysts’ price target is $12.13)
Up from its lows. He stays away from hardware producers, as it's hard to differentiate products except for Apple. Issue of timing. Huawei is still a serious player. Hardware is traditionally a hard business to make money in.
Europe was more advanced than Canada until 2000s in terms of telecommunications. Now that Europe has lowered the cost of consumer phones, there was a lull and under investment in the network in Europe. There will be continuing development with towers for wireless activities and 5G. Political concerns with Huawei will help Ericsson. Optical equipment grow quickly and then stagnates.
Nokia vs. Ericsson These companies have come into their own since the US government has pressured other government to not use Huawei for their 5G networks. Ericsson has done well in 5G. Nokia made an acquisition of Alcatel-Lucent that was difficult to pull off but has since gotten a lot better. Nokia will do a little better than Ericsson. Nokia has new management.