ERIC Stock Today: January 24 Buyback Plan Lifts Shares After Q4 Beat
ERIC stock jumped on January 24 after Ericsson topped Q4 profit expectations and announced its first-ever 15 billion SEK ($1.7 billion) share repurchase through 2027 alongside a dividend increase. For US investors, North America remains a core market for the Swedish vendor. At $9.58, the ADR sits above its 200-day average, with improving cash returns, cost cuts, and proceeds from the Iconectiv sale supporting sentiment. We break down what the Ericsson buyback and Ericsson earnings mean for near-term risk and reward.
Q4 beat and capital return plan
Ericsson’s stronger profitability reflects deeper cost savings and disciplined project mix, according to coverage in the Wall Street Journal and Yahoo Finance. Management paired the beat with a dividend increase and a SEK 15 billion buyback running through 2027. Proceeds from the Iconectiv sale and ongoing job reductions boost cash generation, which funds these returns without stretching the balance sheet.
The announced repurchase equals about 4.9% of market value based on a $34.8 billion market cap, a meaningful support for per-share metrics if executed steadily. Pacing through 2027 gives flexibility across cycles. In our view, the plan signals confidence in cash flow while preserving room for selective investment in 5G and enterprise wireless solutions. Dividend growth adds another layer to total return potential.
Implications for US investors
ERIC stock could benefit if potential EU restrictions on high-risk 5G vendors shift share in Europe, while North America remains a key profit center. The combination of policy tailwinds, a leaner cost base, and disciplined pricing could stabilize margins. Still, US carrier spending is cyclical, so orders may remain uneven quarter to quarter despite better visibility on cash returns.
The timing of the Ericsson buyback and dividend increase lines up with improving free cash flow. With interest coverage of 8.95 and debt-to-equity of 0.43, balance sheet risk looks manageable. If carrier capex stays soft, buybacks can offset slower organic growth. If spending recovers, operating leverage should help earnings, supporting ERIC stock over a 12 to 24 month view.
Valuation and key levels
At $9.58, ERIC trades at 12.9x TTM EPS with an estimated 2.3% dividend yield and an implied free cash flow yield near 10%. The shares sit above the 200-day average of $8.59 and near the 50-day of $9.58. Analysts skew cautious, with 4 Hold and 2 Sell ratings. Our Meyka Stock Grade is B+ (BUY) with a 12‑month model forecast of $11.54.
RSI at 41.9 and a slightly negative MACD point to a cooling tape. Bollinger Bands show support near $9.37 and resistance around $9.86, with today’s range at $9.44 to $9.65. The 200-day trend is rising, while ADX near 21 signals a modest trend. Next earnings are due April 17, 2026, a potential catalyst for ERIC stock.
Final Thoughts
ERIC stock has a clearer path to shareholder returns after a Q4 profit beat, a higher dividend, and a SEK 15 billion buyback through 2027. The plan equals roughly 5% of market cap and should aid per-share metrics even if carrier spending stays mixed. Fundamentals look sound with mid-teens earnings multiple, solid interest coverage, and healthy free cash flow. Into the next print on April 17, we are watching buyback pacing, gross margin discipline, North American order trends, and any updates on the Iconectiv sale proceeds. For near-term trading, $9.37 support and $9.86 resistance frame risk, while a close above the 50-day could invite momentum buying.
FAQs
Why did ERIC stock rise on January 24?
Shares moved higher after Ericsson beat Q4 profit expectations, raised its dividend, and announced a SEK 15 billion ($1.7B) buyback through 2027. Cost reductions, proceeds from the Iconectiv sale, and steady North American business support cash generation, improving confidence in near-term returns and earnings quality.
How big is Ericsson’s buyback and what is the timeline?
The program totals SEK 15 billion, about $1.7 billion, to be executed through 2027. At today’s market cap near $34.8 billion, that equals roughly 4.9% of value. A phased approach gives flexibility across demand cycles while supporting EPS and offsetting dilution over time.
Is ERIC stock attractive on valuation after the rally?
At $9.58, ERIC trades around 12.9x TTM EPS with an estimated 2.3% dividend yield and a free cash flow yield near 10%. It sits above the 200‑day average. The setup looks reasonable if margins hold and buybacks progress, though analysts remain cautious with more Hold than Buy ratings.
What risks should investors watch now?
Key risks include lumpy carrier capex, competitive pricing in 5G, project execution, and potential delays in policy decisions that could shift market share. Currency swings versus the dollar can affect the ADR. Also watch the pace of cost cuts and the timing of cash inflows from asset sales.
What price levels matter most in the short term?
Technically, support sits near $9.37, the lower Bollinger Band, with resistance around $9.86. The 50‑day average is near $9.58 and the 200‑day near $8.59. A sustained move above resistance could target the 1‑year high at $10.53, while a break below support risks a deeper pullback.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
