The company maintained its 2022 earnings before interest and taxes (EBIT) target of 12%-14%, excluding charges, and boosted its margin forecast from its networks business as telecom operators across the world upgrade to 5G technology.

Ericsson shares fell 6.6%.

Handelsbanken analyst Daniel Djurberg said the drop was due to the 2022 group operating margin target being left unchanged and that the company provided no new measurable targets for growth.

"The new long-term adjusted EBITA and FCF (free cash flow) targets are positive and probably above most analysts' long-term estimates. Having said that they are seen as distant and thereby vague," he told Reuters.

Ericsson CEO Borje Ekholm said the company was confident in reaching its targets for this year, as well as for 2022 and beyond.

"Sometimes we overfocus on 2022. It's only a milestone to something greater," he told investors during presentations for its capital markets day on Tuesday.

The telecom group has benefited from the global deployment of 5G technology as diplomatic pressure from the United States has eroded market leader Huawei's dominance in regions such as Europe.

But late on Monday, Sweden's telecoms regulator halted 5G spectrum auctions after a court suspended parts of its decision that had excluded Chinese telecom equipment maker Huawei from 5G networks.

For the longer term, Ericsson also said it was targeting an operating margin - earnings before interest, tax, depreciation and amortisation (EBITA) - excluding restructuring charges of between 15% and 18% beyond 2022.

For networks, the 2022 operating margin target was raised to 16%-18% from 15%-17%, but Ericsson reduced its margin target for its digital services business to 4%-7% from 10%-12% in 2022.

It set no targets for 2021.

The company, which had an operating margin (EBIT) of 11.1% for the January-September period - on track to reach its previous margin target of at least 10% in 2020 - also set a new target of long-term free cash-flow of 9% to 12% of sales.

Cevian Capital, one of Ericsson's biggest owners with 5.45% of shares, said the new long-term margin goal showed the company's potential.

"Ericsson should be able to reach the higher part of the range in 2024 at the latest," it said.

Citi analysts said "the lack of upgrades might disappoint some."

Ericsson has won contracts from all three major operators in China to supply radio equipment for 5G networks.

(Reporting by Supantha Mukherjee and Helena Soderpalm; editing by Niklas Pollard/Barbara Lewis/Jane Merriman)

By Supantha Mukherjee and Helena Soderpalm