Bank of America Securities analyst Didier Scemama reiterated a Hold rating on Nokia today and set a price target of €5.66.
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Didier Scemama’s rating is based on Nokia’s recent strategic shift and financial outlook. The company’s transition towards a software-centric revenue model in Mobile Networks aims to enhance margins and return on invested capital, but this may impact revenue growth negatively. Additionally, the financial targets for Network Infrastructure were considered somewhat disappointing, with sales projected to grow at a 6-8% CAGR by 2029, which is below expectations.
Furthermore, while Nokia sees significant opportunities in AI and potential revenue growth from IP and Optical Networking, the overall growth in Network Infrastructure remains muted. The price objective was lowered to €5.66 due to these factors, and Nokia’s valuation is at the upper end of its historical range. These elements combined led to the reiteration of a Hold rating, reflecting a balanced view of potential opportunities and challenges.
In another report released today, UBS also maintained a Hold rating on the stock with a €5.40 price target.