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Technology Stocks : Nokia Corp. (NOK)

NOK 6.910

-3.1%

Oct 31 9:30 AM EDT

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From: Eric L	9/28/2014 3:21:33 PM
	2 Recommendations Recommended By Runomo™ zax Read Replies (1) of 9255

Nokia YTD & CYTD Performance \| Ready to move out and up? Oppenheimer and Canaccord Genuity think so ... Analysts at Canaccord Genuity raised their price target on shares of Nokia Co. from $11.00 to $12.00 in a research note on Monday. They now have a “buy” rating on the stock. Separately, analysts at Oppenheimer upgraded shares of Nokia Co. from a “market perform” rating to an “outperform” rating in a research note on Monday, September 15th. They now have a $12.00 price target on the stock, up previously from $8.40. >> Now 2 Analysts See Nokia Shares Worth 40% More Jon C. Ogg 24/7 Wall St. September 22, 2014 Nokia Corp. (NYSE: NOK) appears to be transitioning from a troubled cellphone maker back into a key communications and infrastructure company. It was just last week that we saw Oppenheimer opine that Nokia shares were at least 40% undervalued. Now we have a separate report in a new week that also sees great upside in Nokia shares as its turnaround takes hold — which put Nokia on our weekend coverage of analyst calls in stocks under $10 with massive upside. Canaccord Genuity’s T. Michael Walkley and Siddharth Sinha have increased their Nokia price target (for New York ADSs that is) to $12 from $11 while maintaining their Buy rating. This matches the upside price target call from Oppenheimer last week. The only difference is that Nokia shares were at $8.37 prior to Oppenheimer’s call, versus $8.64 prior to Canaccord Genuity’s call. Still, this is upside of about 39% to the new target — or 40% upside if you round up. Walkley and Sinha said: "With our belief the Networks business is positioned for improving trends throughout the second half of 2014 combined with the longer-term potential for strong high margin licensing revenue and HERE sales growth, we believe Nokia shares represent an attractive long-term investment. We believe Nokia’s 2014 guidance for licensing revenue to reach an annual run rate of 600 million euro understates the long-term potential for this business now that Nokia no longer will need to cross license its own mobile device sales." The team is also positive on Nokia’s legal front and see near-term catalysts driving Nokia shares higher in a sum of the parts analysis. They said: "We believe the Samsung arbitration ruling in 2015 and new initiatives to monetize patents provide strong long-term high-margin growth potential. We also anticipate sustained strong margins in Networks and strong long-term growth from HERE. We view third quarter (2014) earnings and the November 14 analyst day in London as potential catalysts. … This sum of the parts analysis leads to a valuation of roughly 37.7 billion euro or roughly $49.0 billion euro, which results in our $12 per share price target." Other key points for the $12 sum of the parts price target (actually $11.94): • Expected sales growth returning to Networks — with double-digit operating margins • Improved balance sheet and solid cash returns • Assumed 1.1 times Networks 2015 sales estimate • 15-times potential annual licensing revenue at end of 2015 • 3-times expected 2015 sales • Anticipated net cash exiting 2015 Seeing an analyst team ratchet a price target up $1 doesn’t seem like much on the surface. The issue is that Nokia is deep in a turnaround, and this sum of the parts analyst call echoes much of last week’s Oppenheimer call. The consensus price target is listed as only being $9.02, and the $12.00 call is still matching the highest analyst price target. Suddenly this is becoming significant. ### - Eric L. -

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