Ericsson's Warning Suggests Soft Demand for Nokia (NOK), But Material Miss Unlikely - Wells Fargo

October 12, 2016 9:21 AM EDT
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Price: $4.76 +0.42%

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    17 Buy, 25 Hold, 6 Sell

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Wells Fargo analyst Maynard Um weighed in on Nokia (NYSE: NOK) following Ericsson's (NASDAQ: ERIC) third quarter warning, which suggests a soft demand environment.

Um said with Nokia set its earnings date for October 27 they believe a material miss may be unlikely, which could be explained by potential share gains and/or better relative trends in China vs the beginning of the year.

They forecast Nokia’s Mobile Networks revenue will decline 12% y/y in Q3 and decline 7% y/y in Q4.

They also believe the broader pressures in the end markets will continue to limit material upside potential to NOK and think restructuring/synergy details will be important.

The maintain a Market Perform rating on NOK.

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