Nokia (Hold, TP: EUR3.80) - Weak markets casting a shadow
Nokia missed Infront consensus underlying EBIT by 27% in Q2 and lowered its 2024 sales guidance to reflect ‘tougher-for-longer’ end-markets. While the share price seems to reflect most negatives already, and we are increasingly optimistic about the medium-term case unfolding from its active portfolio management and capital allocation, we still expect the share price to be range-bound until investors evaluate the credibility of the hockey-stick, Q4-tilted earnings rebound in its guidance. We have cut our 2024–2025e non-IFRS EBIT by 4–8%, and reiterate our HOLD, but have raised our target price to EUR3.8 (3.6) as our estimate cuts are more than offset by accelerated buybacks and stronger FCF.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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