Inderes raises its recommendation for telecommunications company Nokia to Hold from Sell and its target price to EUR 7 from EUR 6.50 following the company’s third-quarter report.
Nokia’s comparable operating profit of EUR 605 million exceeded consensus of EUR 453 million. Sales to AI and cloud customers more than doubled to EUR 631 million, while order intake from these customers amounted to EUR 1.5 billion.
Inderes raises its earnings forecasts for the coming years by 6-7%, supported by a growing order backlog. Nokia expects optical networks and IP networks to grow by a combined 25-30% next year.
Despite stronger growth prospects, Inderes considers the valuation to remain historically high and the risk-reward ratio to be weak. The research house believes that a large part of the expected earnings growth is already priced into the stock.
