UPDATE: Canaccord Genuity Upgrades Nokia (NOK) to Buy

Canaccord Genuity upgraded Nokia (NYSE: NOK) from Hold to Buy with a price target of $7 (prior $5.5). Analyst T. Michael Walkley sees positive long-term risk-reward, and he anticipates strong earnings growth in 2017 and 2018.

"We believe Nokia management has a strong track record of operational excellence and will continue its strong execution on cost cutting initiatives following the Alcatel Lucent acquisition. Further, we believe the technology licensing business can also create a source of high margin growth," said Walkley.

"Longer term, we believe the management team has a cogent plan to integrate Alcatel-Lucent to create a strong technology leadership culture while also achieving its recently announced above €900M cost synergy target by 2018. We remain positive the acquisition can deliver and likely exceed its €900M cost synergy target by 2018, and we introduce our 2018 estimates reflecting synergy execution and increase our price target to $7 and upgrade to BUY from Hold," continued the analsyt.

Walkley added, "We had been concerned consensus estimates were aggressive for 2016 based on modeling synergies too quickly combined with higher revenue expectations than our previous estimates for 2016. Following Nokia management’s updated guidance for above 7% network margins for 2016 with below normal seasonal trends for Q2/2016, we believe consensus estimates are now at levels that we believe Nokia should execute well against."

Canaccord Genuity sees 2018 non-IFRS EPS estimate of $0.53.

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 $5.18 yesterday.

You May Also Be Interested In

• Citi Upgrades United Microelectronics Corp (2303:TT) (UMC) to Buy 'with limited downside'
• Summit Insights Downgrades Silicon Labs (SLAB) to Hold, 'expect its stock to be an inline performer'
• Piper Sandler Upgrades SmartFinancial (SMBK) to Overweight 'on Risk/Reward Dynamic for Clean Bank Under TBVPS'