Nokia as an investment (Part 4)

[roger.lussi]

Today, 09:12

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Handelsbanken lowers the target price for Nokia to 9.80 euros (12), reiterates hold

newsroom@finwire.se

News agency Finwire

[roger.lussi]

Today, 09:19

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Ålandsbanken raises its view on telecom company Nokia to neutral from negative.

Underlying EBIT of 434 million euros beat consensus, but was boosted by one-off items and accounting effects. Nokia’s forecast for the third quarter is approximately 20 percent below consensus, while the full-year outlook remains unchanged.

Following a share price decline of over 40 percent, the bank sees the valuation as reasonable, but the upside potential as limited without stronger AI and cloud growth.

Samuel Alaei
Nyhetsbyrån Finwire

[L_Dabio]

@Lexus

In my own opinion, analysts with a negative recommendation are now being offered an exceptionally good opportunity to re-evaluate their stance and correct their previous wrong view. OP (OP Financial Group) took this bait.

What about your own views on Nokia or the environment in which Nokia operates? Are they dependent on your own stock ownership? In other words, do they change in relation to it? The volume of your analyses certainly changed.

I don’t mean at what price level to buy or sell. An honorable analyst is objective in their analyses, right?

[Lexus]

I don’t quite understand what you are getting at; I feel I am trying to analyze Nokia very objectively. In what way do you feel I haven’t? I strive to compare expectations with the kind of result Nokia is capable of delivering.

I have been putting it out there for quite a while now, probably over 6 months, that I believe Nokia is capable of achieving an adjusted operating profit of 4 billion (or even slightly more) in 2028. I think the current pricing is such that if they do achieve that, the share price should rise. The situation was different when the share price was at 12–15 euros. I believe a rational investor considers these things.

If you read my messages from yesterday, for example, you’ll see I am quite critical in many respects. It’s just that general expectations regarding the stock have fallen. And I still get hives if someone tries to “over-hype” the stock—I certainly won’t be guilty of that myself.

[Lexus]

This is how I wrote, for example, at the beginning of June. And the share price is now right there.

@Lexus

As I see the situation myself, I think a price level of 8-10 euros is justified by the 2028 earnings.

@Lexus

I personally expect that in the current economic environment, Nokia is capable of an operating profit of about 4 billion (i.e., in 2028).

@Lexus

I still agree that Nokia is in better shape than it has almost ever been. However, it is already being priced in a very fair way.

And this is what I wrote, for instance, in May.

@Lexus

I remain very positive about Nokia, but with current pricing, you cannot turn a blind eye to the fact that there are also other scenarios for the future besides the overly positive ones. The forum is now chasing those. It is therefore entirely possible that 30-50% will be temporarily wiped off the price. But for a long-term investor, the pieces are still in a very good position, though those risk and threat scenarios should still be monitored. If the medium-term potential is around 12 euros, the long-term potential is at least double that level.

@L_Dabio In my opinion, my views and objectivity are fully in line with how I have written previously, regardless of how large the position size is at any given time.

Guiding principle: be critical when the share price runs upwards, and less so when the price has fallen.

Edit: No worries @L_Dabio, I didn’t take it badly, even though I certainly wrote in a defensive style. I would like to add to my previous messages that I still have significant concerns regarding the sustainability of data center construction. I fear a money problem, or more precisely, I suspect that hyperscalers will have to scale back their investments more substantially. I hope I’m wrong, but in any case, Nokia’s share price is starting to be at a level where I think this risk is worth taking.

That is why I significantly reduced my use of the forum, as I couldn’t really read it anymore; I felt that along with Nokia’s share price level, (sane) criticality disappeared from the analyses. It is a different matter to think about the sensibility of an investment whether its multiplier is, for example, 20x or 40x.

[Prototyping]

Something that caught my eye yesterday was that Defense wasn’t mentioned anywhere—was the word “defense” even avoided entirely? It’s a shame that none of the professionals on the webcast asked about it. It’s puzzling, especially since it was quite prominently featured earlier in the year. Being an optimist, I’m interpreting this complete silence as a positive sign—that something big is happening in a sensitive area. Could my speculation just be wishful thinking?

[Kunhalvallasaa]

Yes, it would be inconceivable that Nokia, with its capabilities, would not have a significant foothold in the Defense sector and its operations. This is a topic that is naturally not shouted about, and Nokia likely does not want to be profiled within the military industry.

[Virgin]

I wonder if there’s already a larger exclusive contract in the defense sector with NATO countries…

[roger.lussi]

Today, 10:02 AM

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UBS lowers the target price for Nokia to 9.65 euros (11), reiterates neutral

newsroom@finwire.se

Nyhetsbyrån Finwire

[MyrtsiZzz]

Defense and NATO will transition to 5G technology sooner or later. My guess as to how this will happen is through dedicated AI-RAN and radio solutions for NATO countries, led by the USA (they want Nvidia). This kills so many birds with one stone, as getting AI onto the battlefield makes it pointless to consider anything else. The guys at Bittium are, of course, figuring out what their role will be, but VHF/UHF radios will certainly be needed alongside 5G as well.

[L_Dabio]

@Lexus

I’m not really sure I understand what you’re getting at; I feel like I’ve been trying to analyze Nokia very objectively. In what way do you feel I haven’t been doing that?

Maybe not. I didn’t mean to offend. Honestly, I just wanted to ask, but this has been cleared up now. So, no doubts at all. It was a completely unnecessary comment. My apologies again; it’s easy for things to be interpreted as “ad hominem” here, which could be handled differently face-to-face. You’ve posted some good analyses. And, of course, everyone does their own due diligence.

[roger.lussi]

Goda skäl hoppa på Nokia igen