Nokia (Hold, TP: EUR4.70) - Lack of short-term triggers
We believe Nokia has a fundamentally low valuation, but do not see the short-term catalysts or a long-term growth story with the potential to change investor sentiment. A major change in capital allocation with increased dividends and buybacks could change this; a proposed new policy is positive, but buybacks are set to kick in only from 2024e. We reiterate our HOLD and have lowered our target price to EUR4.7 (5.0).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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