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TECHNOLOGY: Ericsson Curve Moves Inside Nokia’s; Rating Upside Seems Limit

TECHNOLOGY

ERICB 

The Ericsson curve has been performing strongly and while we think that momentum remains with the name given top-line strength and better exposure to a recovery in North America, we caution that there is limited rating upside on the cards and we don’t think the name can trade significantly further inside the Nokia curve given it retains a HY rating, is limited by a less diversified (i.e. mobile-focussed) business model and in the face of Nokia’s still strong balance sheet.

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ERICB 

The Ericsson curve has been performing strongly and while we think that momentum remains with the name given top-line strength and better exposure to a recovery in North America, we caution that there is limited rating upside on the cards and we don’t think the name can trade significantly further inside the Nokia curve given it retains a HY rating, is limited by a less diversified (i.e. mobile-focussed) business model and in the face of Nokia’s still strong balance sheet.

Keep reading...Show less