Telefonaktiebolaget LM Ericsson (publ) Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

There's been a notable change in appetite for Telefonaktiebolaget LM Ericsson (publ) (STO:ERIC B) shares in the week since its yearly report, with the stock down 10% to kr85.20. Statutory earnings per share fell badly short of expectations, coming in at kr0.01, some 99% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at kr248b. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Telefonaktiebolaget LM Ericsson

Taking into account the latest results, the current consensus from Telefonaktiebolaget LM Ericsson's 20 analysts is for revenues of kr254.6b in 2025. This would reflect an okay 2.7% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 102,519% to kr6.16. In the lead-up to this report, the analysts had been modelling revenues of kr257.7b and earnings per share (EPS) of kr6.00 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at kr84.42, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Telefonaktiebolaget LM Ericsson at kr105 per share, while the most bearish prices it at kr57.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 2.7% growth on an annualised basis. That is in line with its 3.3% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 3.1% annually. It's clear that while Telefonaktiebolaget LM Ericsson's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Telefonaktiebolaget LM Ericsson's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Telefonaktiebolaget LM Ericsson. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Telefonaktiebolaget LM Ericsson analysts - going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Telefonaktiebolaget LM Ericsson that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.