Nokia (Buy, TP: EUR5.40) - Growth momentum starting to build
Sales trends are turning positive after six negative quarters. While Nokia’s adj. EBIT guidance for 2025 fell shy of Infront consensus, it has now de-risked the case, mainly driven by investments to strengthen the data centre growth outlook. We reiterate our BUY, have raised our target price to EUR5.4 (5.2), and lowered our adj. EBIT for 2025–2026e by 8–1%. We see: 1) accelerated earnings momentum, with adj. EBIT growth of 18% YOY for its core divisions in 2025e; 2) the data centre story potentially shifting the investor base from value- to growth-oriented, providing further valuation headroom; 3) balance sheet strength; and 4) Chinese NBS JV poison pill removal could increase the possibility of a break-up.Nokia is an Internet and communications technology company based in Finland. Co.'s operations are focused on three businesses: network infrastructure software, hardware and services, which Co. offers through Networks; location intelligence, which Co. provides through HERE; and advanced technology development and licensing, which Co. pursues through Technologies. Co. maintains a global presence with operations and Researh & Development facilities located in Europe, North America and Asia, and sales in approximately 130 countries. Co. has an installed base of around 600 customers worldwide and these operators serve over 4 billion subscribers.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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