Nokia (Hold, TP: EUR4.50) - Growth narrative starting to build
We consider Q3 a de-risking event for Nokia, which executed well on the factors in its control in a tough environment. We see the potential for an investor-base shift in 2025 to drive multiples expansion, as: 1) the net sales trend should stabilise in Q4; 2) gross margins and cost actions should boost earnings momentum (~25% adj. EPS growth in 2025e excluding positive one-offs from the 2024 base); and 3) the data centre growth story gains traction. We reiterate our HOLD, but have raised our target price to EUR4.5 (3.9).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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