Nokia (Buy, TP: EUR5.10) - One-off blew momentum off course
Nokia’s stock traded down 11% despite fairly in-line underlying Q1 results. We do not believe its repeated 2025 EBIT guidance looks conservative, as we have lowered our 2025e EBIT by 9% and have cut our target price to EUR5.1 (5.5). We reiterate our BUY, as we see: 1) accelerated earnings momentum, with adj. EBIT growth of 14% YOY for its core divisions in 2025e; 2) the data centre story should accelerate under its new CEO, potentially shifting the investor base from value- to growth-oriented, providing further valuation headroom; 3) balance sheet strength; and 4) while Nokia highlights the strategic nature of its Mobile Networks business, we still see 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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