JPMorgan analysts downgraded shares of Ericsson (ERIXF) and Nokia (HE:NOKIA) (NOK) to Neutral from Overweight.
On the former, the analysts take note of a cheap valuation but notes it is “difficult to get excited given challenging ‘24 market.”
“We think 1H24 is going to remain challenging for Ericsson despite the company seeing the fruits of its restructuring program announced in 4Q’22. The fruits mean that Ericsson stock may perform relatively better than Nokia in the short term,” the analysts wrote in a note.
Despite these comments, the analysts also downgraded the rating on Nokia shares due to a lack of near-term positive catalysts.
“Despite the likelihood in our opinion that the co. will miss 1H24 expectations, the downside risk is limited,” they said.
The move on Nokia is made as JPMorgan analysts await better clarity on the timing of the U.S. revival to get more constructive on the name.
Nokia shares fell 1.4% in pre-market Thursday trade on the news while Ericsson shares are up 0.2% in Stockholm today.