Can Ericsson Recover From Its 9.2% Drop Over The Past Two Weeks?

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ERIC: Ericsson logo
ERIC
Ericsson

Ericsson stock (NASDAQ: ERIC) is down 9.2% in the past two weeks (ten trading days), performing much worse than the S&P 500, which was down 4% over this period. However, if you look at the change over the last week (five trading days), the stock has pulled up 1.4%, beating the broader markets which lost a marginal 0.7% over this period. Despite this, the stock still has a long way to go before it recovers the 9.2% drop. Ericsson’s most recent Q3 ’22 earnings, saw revenue rising from $5.4 billion in Q3 ’21 to $6.52 billion in Q3 ’22. However, COGS and other operating expenses rose at a faster rate, and EBIT margin dropped from 15.7% to 10.5% over this period. Due to this, net income dropped and EPS came in lower at $0.15 in Q3 ’22, against $0.17 in Q3 ’21.

Now, is ERIC stock set to continue its underperformance or could we expect a recovery? We believe that there is a decent 54% chance of a rise in ERIC stock over the next month (21 trading days) based on our machine learning analysis of trends in the stock price over the last ten years. See our analysis on ERIC Stock Chance of Rise. For additional details about the company’s historical returns and comparison to peers, see Ericsson (ERIC) Stock Return. 

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  6. Ericsson Stock Looks Set To Bounce Back Strongly After A 30% Drop Last Month

Twenty-One Day: ERIC -3.3%, vs. S&P500 -3%; Underperformed market

(33% likelihood event; 54% probability of rise over next 21 days)

  • ERIC stock lost 3.3% over the last twenty-one trading days (one month), compared to a broader market (S&P500) drop of 3%
  • A change of -3.3% or more over twenty-one trading days is a 33% likelihood event, which has occurred 840 times out of 2517 in the last 10 years
  • Of these 840 instances, the stock has seen a positive movement over the next twenty-one trading days on 450 occasions
  • This points to a 54% probability for the stock rising over the next twenty-one trading days

Ten Day: ERIC -9.2%, vs. S&P500 -4%; Underperformed market

(6% likelihood event; 49% probability of rise over next 10 days)

  • ERIC stock lost 9.2% over the last ten trading days (two weeks), compared to a broader market (S&P500) drop of 4%
  • A change of -9.2% or more over ten trading days is a 6% likelihood event, which has occurred 155 times out of 2518 in the last 10 years
  • Of these 155 instances, the stock has seen a positive movement over the next ten trading days on 76 occasions
  • This points to a 49% probability for the stock rising over the next ten trading days

Five Day: ERIC 1.4%, vs. S&P500 -0.7%; Outperformed market

(39% likelihood event; 49% probability of rise over next five days)

  • ERIC stock gained 1.4% over a five-day trading period ending 12/29/2022, compared to the broader market (S&P500) which was down 0.7% over this period.
  • A change of 1.4% or more over five trading days (one week) is a 39% likelihood event, which has occurred 981 times out of 2517 in the last 10 years
  • Of these 981 instances, the stock has seen a positive movement over the next five trading days on 483 occasions
  • This points to a 49% probability for the stock rising over the next five trading days

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Dec 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 ERIC Return -9% -47% -1%
 S&P 500 Return -7% -20% 70%
 Trefis Multi-Strategy Portfolio -6% -22% 213%

[1] Month-to-date and year-to-date as of 12/30/2022
[2] Cumulative total returns since the end of 2016

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