Wait for June Quarter for Meaningful Read on Nokia (NOK), Oppenheimer Says

February 7, 2013 10:29 AM EST
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Price: $4.72 +0.64%

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Oppenheimer recently met with Nokia (NYSE: NOK) management, commenting on key takeaways today.

Analyst Ittai Kidron noted that Nokia needs a stronger presence in mid- and high-end smartphones with its portfolio expected to expand in 2013. Fiscal second-quarter 2013 will be the first true read as it will be the first quarter when momentum will be able to be judged. The first-quarter 2013 will be another Microsoft (Nasdaq: MSFT) Windows Phone channel-fill period with the ramp-up of the 620.

Nokia's Asha line will be faced with near-term risks tied to a wave of well-featured, low-end Google (Nasdaq: GOOG) Android-based smartphones hitting in key markets. ASPs and margins could come under pressure as a result.

Kidron and his team see Nokia with a long-term margin advantage over peers given IPR. Near-term, smartphones could see a life in margins, bu Mobile Devices are at risk given pressures surrounding its Asha line. The Symbian ramp-down/620 ramp up are positive for margins.

Kidron and his team remain on the sidelines as Nokia's story plays out. He thinks the March quarter won't provide a true read, while the June quarter will flush out Asha positioning and WP8 shipments will better reflect demand.

Oppenheimer rates Nokia at Perform, no price target. Shares are down over 1 percent Thursday.

For an analyst ratings summary and ratings history on Nokia click here. For more ratings news on Nokia click here.

Shares of Nokia closed at $4.12 yesterday.

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