Ericsson (NASDAQ:ERIC) Stock Sees Heavy Call Option Buying

Key Points

• Unusual options activity: Investors bought 2,734 Ericsson call options, 51% above the typical daily volume of 1,807, signaling increased bullish interest.
• Shares gained 9.2% to $10.46 on heavy trading volume after Ericsson reported quarterly earnings of $0.18 per share and revenue of $5.94 billion, exceeding analyst expectations. Revenue rose 5.8% year over year.
• Analyst sentiment remains cautious: Ericsson has a consensus “Hold” rating and a $9.60 price target, while higher AI-related component costs could pressure margins despite improving organic growth and Networks demand.

Ericsson (NASDAQ:ERIC - Get Free Report) was the recipient of some unusual options trading activity on Thursday. Stock investors acquired 2,734 call options on the stock. This represents an increase of 51% compared to the typical daily volume of 1,807 call options.

Institutional Trading of Ericsson

Several hedge funds have recently added to or reduced their stakes in ERIC. Public Employees Retirement System of Ohio bought a new position in shares of Ericsson during the second quarter valued at $15,812,000. Bank of New York Mellon Corp grew its holdings in shares of Ericsson by 8.5% in the 1st quarter. Bank of New York Mellon Corp now owns 160,581 shares of the communications equipment provider's stock worth $1,810,000 after purchasing an additional 12,534 shares during the last quarter. Finally, Advisors Preferred LLC acquired a new stake in shares of Ericsson during the 1st quarter worth about $493,000. Institutional investors own 7.99% of the company's stock.

Ericsson Stock Up 9.2%

Shares of NASDAQ ERIC traded up $0.88 during mid-day trading on Thursday, reaching $10.46. The company had a trading volume of 25,541,209 shares, compared to its average volume of 10,512,660. Ericsson has a twelve month low of $9.03 and a twelve month high of $13.77. The company has a debt-to-equity ratio of 0.21, a quick ratio of 0.89 and a current ratio of 1.12. The stock has a market capitalization of $35.27 billion, a PE ratio of 13.37, a price-to-earnings-growth ratio of 1.80 and a beta of 0.96. The stock's 50 day moving average is $9.90 and its 200-day moving average is $10.95.

Ericsson (NASDAQ:ERIC - Get Free Report) last released its quarterly earnings data on Thursday, October 15th. The communications equipment provider reported $0.18 EPS for the quarter, topping analysts' consensus estimates of $0.14 by $0.04. The firm had revenue of $5.94 billion for the quarter, compared to the consensus estimate of $5.59 billion. Ericsson had a return on equity of 20.63% and a net margin of 10.72%. The firm's revenue was up 5.8% on a year-over-year basis. During the same quarter in the prior year, the company posted $1.37 earnings per share. As a group, equities analysts anticipate that Ericsson will post 0.60 earnings per share for the current fiscal year.

Ericsson Dividend Announcement

The company also recently announced a dividend, which was paid on Tuesday, September 29th. Investors of record on Tuesday, September 29th were paid a $0.1579 dividend. The ex-dividend date was Tuesday, September 29th. Ericsson's dividend payout ratio (DPR) is presently 25.64%.

More Ericsson News

Here are the key news stories impacting Ericsson this week:

• Positive Sentiment: Q3 results exceeded expectations: Ericsson reported adjusted EPS of $0.18 versus the $0.14 consensus estimate and revenue of $5.94 billion versus expectations of $5.59 billion. Revenue increased 5.8% year over year, supported by strong Networks demand. Ericsson reports third quarter results 2026
• Positive Sentiment: Organic growth accelerated: Third-quarter organic sales growth reached 7%, with the Networks division up 9%. The performance suggests improving telecom-equipment demand and helped offset weakness or slower growth in other businesses. Ericsson shares gain after 7% organic sales growth
• Positive Sentiment: 6G milestone strengthens Ericsson’s technology positioning: Ericsson and Verizon completed what they described as the first pre-standard outdoor 6G field call in the 7 GHz band at a commercial site in California. The test moves 6G beyond laboratory demonstrations and could support future equipment opportunities, although commercialization is still distant. Verizon and Ericsson 6G field call
• Neutral Sentiment: Operating structure is being streamlined: Ericsson will combine several Asian market areas into a new Asia-Pacific unit and reorganize its Enterprise Wireless Solutions portfolio. Management expects better use of R&D resources and greater efficiency, but execution and transition costs could affect near-term results. Ericsson announces structural changes
• Negative Sentiment: Margins face cost pressure: Ericsson warned that AI-related demand is increasing the cost of chips and other components. The company plans price increases, but higher input costs may pressure profitability through 2027. Quarterly profit also declined because the prior-year period benefited from a large divestment gain. Ericsson plans price hikes as equipment costs rise

Analyst Ratings Changes

A number of brokerages have recently commented on ERIC. Danske raised Ericsson from a "hold" rating to a "buy" rating in a report on Wednesday, July 15th. Citigroup reaffirmed a "neutral" rating on shares of Ericsson in a research note on Wednesday, July 15th. Weiss Ratings lowered Ericsson from a "buy (b)" rating to a "buy (b-)" rating in a research note on Friday, August 28th. JPMorgan Chase & Co. cut their price objective on Ericsson from $11.40 to $10.20 and set a "neutral" rating for the company in a report on Thursday, October 8th. Finally, Morgan Stanley lowered shares of Ericsson from an "equal weight" rating to an "underweight" rating and reduced their price objective for the company from $11.00 to $9.00 in a research report on Tuesday, September 22nd. Two analysts have rated the stock with a Buy rating, three have assigned a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of "Hold" and a consensus price target of $9.60.

Ericsson Company Profile

Telefonaktiebolaget LM Ericsson, commonly known as Ericsson, is a Swedish telecommunications and technology company that provides communications infrastructure, software, and related services to telecommunications operators and enterprises worldwide. The company was founded in 1876 by Lars Magnus Ericsson and is headquartered in Stockholm, Sweden.

Ericsson's offerings include mobile network equipment and services for 4G and 5G networks, radio access systems, core networks, transport solutions, and network management software.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.