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Oppenheimer raises Nokia to outperform rating with $12 target price

Nokia-flag-300x200Analysts are increasingly expressing confidence in Nokia’s strategical direction and management. Oppenheimer has just raised its ratings on Nokia stock to outperform from perform with a $12 price target. Read what the analysts have to say about Nokia’s future performance, below.

Nokia Networks:

We’re increasingly confident Nokia’s Networking segment could maintain operating margins at the higher end of management’s longer term guidance range of 5% to 10%. We believe Nokia can balance a more aggressive sales push around global 4G- LTE builds with tight operational efficiency that has become ingrained in the company.

HERE:

HERE maps were embedded into more than 10 million new cars in 2013 and so far in 2014 Nokia has licensed HERE maps to 2.8 million cars in 1Q14 and 3.3 million cars in 2Q14. We believe Nokia is the dominant vendor in the field (potentially with as much as ~80% of the auto market) and is garnering about €35 per car. We see opportunities to gain more per car as connected car services are tied to auto navigation, HD mapping becomes more of a contributor and with the potential for more self-guided automotive navigation elements get incorporated over time.

Nokia Technologies:

We used a 1% royalty rate baseline, but an argument can be made that there is royalty upside from a greater rate than we have modeled. A comparison to Ericsson would suggest Nokia has a long way to go in collecting royalty revenue from a broad industry vendor base, and Qualcomm’s royalty rates (complete license or single- mode licenses) suggest the royalty rate could be well above 1% as well. In short, we believe our “1%” scenario is conservative suggesting further upside potential not captured in our SOP analysis.

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Nayan
Nayan has more than 10 years of experience of covering Technology and innovations. He is a big Nokia fan and Tech disruptions aficionado. He loves to review new cool gadgets and writing about Android, iOS, Gadgets and general Technology stuff. He has been associated with other well-known Tech sites WinCentral and GadgetOx since long.He currently sports a Lumia 950 XL and Nexus 5X. Other interests include listening to Nu-Metal Hits and Kick-Boxing. Write to him at Email: [email protected]
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