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Deutsche Cuts Nokia (NOK) to Sell; Windows Phone 8 No 'Game Changer'

September 6, 2012 7:11 AM EDT Send to a Friend
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Price: $7.30 -2.28%

Rating Summary:
    12 Buy, 24 Hold, 9 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 23 | Down: 10 | New: 20
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Deutsche Bank is cutting its rating on Nokia (NYSE: NOK) from Hold to Sell, while dropping its price target from €1.70 to €1.60.

In the move, Deutsche cites how Microsoft's (Nasdaq: MSFT) Windows Phone 8 isn't going to be a game changer for Nokia, particularly against competition from lower-cost Google (Nasdaq: GOOG) Android based phones heading into full-year 2013.

The firm is modeling fourth-quarter 2012 Lumia shipments of 4 million units and fiscal 2013 shipments of 25 million units. The firm commented, "More importantly we are concerned that Win 8’s still high hardware requirements may not allow Nokia to profitably compete in the fast-growing <$200 smartphone market. We also believe that low-cost Android smartphones (<$100 ASP) will start to cannibalize Nokia’s mobile phone business in 2013 (~50% of device revenues) and model continuing unit and revenue declines
here."

Deutsche also sees Nokia generating negative free cash flow in the second-half of 2012 and into 2013, due mostly to lower unit expectations and compressed margins.

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 $2.38 yesterday.




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