Strength Seen in Nokia (NOK): Can Its 5% Jump Turn into More Strength?
Nokia (NOK) shares ended the last trading session 5% higher at $5.45. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 10.4% gain over the past four weeks.
NOK’s rally is driven by optimism over its back-to-back 5G network deployment wins with multiple telecom operators such as Net4Mobility, DITO Telecommunity Corporation, T-Mobile and Optus. It has also resolved a long-drawn patent licensing dispute with German automobile manufacturer, Daimler. Markedly, the company has been sparing no efforts to strengthen its enterprise sales on the back of new customer additions. Its Network Infrastructure business group also benefits from the increasing demand for next-generation connectivity. Encouraged by solid traction in 5G portfolio, the Finnish telco equipment vendor is on track to achieve sustainable, profitable growth and technology leadership, thanks to its accelerated strategy execution, sharpened customer focus and reduced long-term costs. We believe that the stock has more upside left.
Price and Consensus
This technology company is expected to post quarterly earnings of $0.06 per share in its upcoming report, which represents a year-over-year change of -14.3%. Revenues are expected to be $6.32 billion, up 12.8% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Nokia, the consensus EPS estimate for the quarter has been revised 3.1% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on NOK going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
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