BofA/Merrill Lynch Adds Nokia (NOK) to 'Most Preferred Tech' List; Sees Upside Catalysts Forming

October 1, 2013 7:45 AM EDT
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BofA/Merrill Lynch (BAML) is adding Nokia (NYSE: NOK) to its "Most Preferred Tech Shares" list, seeing a slew of positive catalysts for the name moving forward.

The stub appears inexpensive following Nokia's agreement to sell its Devices & Services unit to Microsoft (Nasdaq: MSFT) last month, BAML said. The stub is currently trading for 0.75- and 0.67-times FY14 and FY15 enterprise value-to-sales multiples leading to pro forma EBIT margins of 11.7 percent and 11.8 percent, respectively.

BAML sees Nokia's patent and licensing division contributing about €500 million in EBIT during FY15 with the potential for more upside surprise.

The Nokia/Microsoft deal should be approved at the November 19th EGM, BAML said.

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 $6.51 yesterday, with a 52 week range of $2.52 to $6.78.


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