Ericsson stock ready for a dry month after rising 5% last week?
Ericsson shares (NASDAQ: ERIC) has gained nearly 5% over the past week and is currently trading at $ 12 a share. Additionally, Ericsson, a multinational networks and telecommunications giant, has seen its stock drop 12% in the past six months, from around $ 14. The company announced its results for the second quarter of 2021 in July this year, where revenues were $ 6.37 billion, down slightly from $ 6.46 billion for the same period. last year. However, gross margins increased from 37.6% in the second quarter of 2020 to 43.4% in the second quarter of 2021, with EBIT margins increasing from 6.9% to 10.6% over this period, thanks to the successful initiatives reduction in business costs.
However, after the recent rally, will ERIC stock continue its bullish trajectory over the next few weeks, or is a correction in the stock more likely? According to the Trefis Machine Learning Engine, which identifies trends in the company’s stock price using ten years of historical data, ERIC stock returns average -0.9% (implying that the stock will largely remain at the around $ 12 level) over the next month (twenty-one trading days) after experiencing a 4.5% rise from the previous week (five days scholarship).
But how would those numbers change if you wanted to hold Ericsson shares for a longer or shorter period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test Ericsson Share Price Forecast after a rise or fall. You can test the chances of recovery over different time intervals of a quarter, a month, or even a day.
MACHINE LEARNING MOTOR – try it yourself:
If Ericsson stock moves -5% over five trading days, THEN over the next twenty-one trading days, Ericsson stock moves an average of 1.7%, with an average probability of 59.3% of a positive return over this period.
In addition, given a -5% movement for the stock over five trading days, it has historically experienced a excess return 0.8% to the S & P500 over the next 21 trading days, with a low probability of 46.9% of a positive excess return.
Some fun scenarios, FAQs and explanation of Ericsson stock movements:
Question 1: Are the price predictions for Ericsson stock higher after a decline?
Reply: Consider two situations,
Case 1: Ericsson share drops 5% or more in a week
Case 2: Ericsson share increases by 5% or more in a week
Is the average return on the Ericsson share higher in the next month after Case 1 or Case 2?
Ericsson shares fares better after case 1, with an expected return of 2.1% over the next month (21 trading days) in case 1 (where the stock has just suffered a loss of 5% during the previous week), against an expected return of -0.8% for case 2. This implies a price forecast of $ 12.35 in case 1 and a figure of $ 12.00 in case 2 using the Ericsson market price of $ 12.10 on 10/14/2021.
In comparison, the S&P 500 has an expected return of 3.1% over the next 21 trading days in case 1, and an average return of only 0.5% for case 2, as detailed in our dashboard. which details the expected return of the S&P 500 after a fall or rise.
Try the Trefis machine learning engine above to see for yourself how the Ericsson stock is likely to behave after a specific gain or loss over a period of time.
Question 2: Does patience pay?
Reply: If you buy and hold Ericsson shares, it is expected that over time short-term fluctuations will cancel each other out and the long-term positive trend will be in your favor – at least if the company is otherwise strong. .
Overall, according to data and calculations from the machine learning engine Trefis, patience absolutely pays for most actions!
For the Ericsson share, the returns over the next N days after a -5% change over the last five trading days are detailed in the table below, along with the returns of the S & P500:
You can try out the engine to see what this table looks like for Ericsson after a larger loss in the week, month, or last quarter.
Question 3: What about forecasting the stock price after rising if you wait a while?
Reply: The expected return after a rise is naturally lower than after a fall, as detailed in the previous question. Interestingly, however, if a stock has won in the last few days, you’d better avoid short-term bets for most stocks.
It is powerful enough to test the trend for Ericsson stock for yourself by changing the entries in the charts above.
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