0946 GMT - Ericsson should be a good relative performer in 2025 given its exposure to more stable telecom operator spending and given the risks to other hardware stocks, JPMorgan analyst Sandeep Deshpande writes. That said, margin risks have increased as the high-margin U.S. market represented 45% of revenue in the first quarter and it's not clear how much customers increased their buying ahead of tariffs. The pre-buy effect could reverse in the second half, he says. Second-quarter margin guidance is better than expectations, aided by a partial Lenovo contract settlement. Given the radio access network market is unlikely to grow in the next few years, investor focus will be on returns, not growth. "Ericsson could make the stock really interesting with a buyback." Shares fall 0.9%. (dominic.chopping@wsj.com)
(END) Dow Jones Newswires
April 16, 2025 05:46 ET (09:46 GMT)
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