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Is this Large Market Cap Stock target price reasonable for Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC)?

The company in question is, Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) currently with a stock price of 7.01 (-1.54% today). The market cap for Telefonaktiebolaget LM Ericsson (publ) is 23283.86, and is in the sector Technology, and Communication Equipment industry. The target price for Telefonaktiebolaget LM Ericsson (publ) is 6.88. Currently Telefonaktiebolaget LM Ericsson (publ) is trading with a P/E of 14.39, and a forward P/E of 11.96. Average volume for Telefonaktiebolaget LM Ericsson (publ) is 3952.83 and so far today it is 6083200.

Performance in the last year for Telefonaktiebolaget LM Ericsson (publ) has been -23.36%. For EPS growth, Telefonaktiebolaget LM Ericsson (publ) has seen a growth of 15.50%, and is looking to grow in the next year to 13.35%. More long term stats show that EPS growth has been 3.60% over the last five years and could be 0.85% for the next five years. Telefonaktiebolaget LM Ericsson (publ) has seen sales growth quarter over quarter at -10.80%, with EPS growth quarter over quarter at -24.60%. The 20-day simple moving average is -5.37%, with the 200-day simple moving average coming to -15.76%.

Since the IPO date for Telefonaktiebolaget LM Ericsson (publ) on the 9/28/1989, Telefonaktiebolaget LM Ericsson (publ) has seen performance year to date to be -23.84%. With Telefonaktiebolaget LM Ericsson (publ) trading at 7.01, the dividend yield is 6.56%, and the EPS is 0.49.

So could Telefonaktiebolaget LM Ericsson (publ), be undervalued? Well as said before P/E is 14.39. The PEG is 16.93, P/S is 0.83 and the P/B is at 1.44. The P/cash is 4.08, with P/free cash flow at *TBA.

Telefonaktiebolaget LM Ericsson (publ) ability to deal with debt shows that the current ratio is 2, and the quick ratio is 1.6. This is with long term debt/equity at 0.13, and total debt/equity at 0.2.

In terms of margins, Telefonaktiebolaget LM Ericsson (publ) has a gross margin of 34.70%, an operating margin of 9.30% and a profit margin of 5.70%.Payout ratio for Telefonaktiebolaget LM Ericsson (publ) is 78.60%. Return on assets come to 4.90% with return on investment coming to 9.10%.

Insider ownership for Telefonaktiebolaget LM Ericsson (publ), is at 0.90% and institutional ownership comes to 8.80%. Outstanding shares are at 3321.52. While shares float is 3022.59. The float short is currently 0.51%, and short ratio is 3.92.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

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Tony Dabbs

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