Nokia (Buy, TP: EUR5.20) - 2025e sisu starting to build
We see an attractive 2025e story unfolding at Nokia and have upgraded to BUY (HOLD) and raised our target price to EUR5.2 (4.5). 1) Organic sales growth is turning positive after six negative quarters. 2) Having outperformed in areas it can control (e.g. gross margin, costs, buybacks) in tough end-markets, we forecast 23% adj. EPS growth YOY in 2025 (excluding one-offs in the 2024e base), and Infront consensus looks beatable. 3) Network Infrastructure represents ~45% of 2025e EBIT (~20% in 2020) where data-centre-driven growth from webscalers and enterprise could aid a shift in the investor base from value- to growth-oriented, providing further valuation headroom. And 4) the balance sheet is strong.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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