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Good News vs. Share Price Stagnation
I keep reading the same thing over and over again. Nokia has good news all the time yet the stock doesn't move. If Nokia cures cancer, it will drop down to $2 etc.
Here is the reality. Good news almost means nothing for Nokia. Nokia with its previous CEO OVER-promised and UNDER-delivered. Per the previous CEO-which shall go un-named- Nokia was supposed to earn .42 Euros per share in 2020. We all know what happened. Nokia was well positioned for the 5G war. We all know what happened.
Large investors and the market in general does not believe in Nokia for now. They want to see Nokia achieve what it promises to achieve in the next few quarters or so. Once Pekka Lundmark is able to deliver on his conservative promises, the stock price will go up.
I mentioned this many times but I'll mention it again. Nokia should be at minimum $5.5-6.5 right NOW. The stock price is at a heavy discount because it has not performed as well as its competitors. Not to mention Nokia lost one of it's largest customers-Verizon- in the 5G race. Plus, Ericsson has HIGHER revenues and LOWER operating expenses. Ericsson is gaining market share while Nokia is losing it (so far).
Here is the thing. I am LONG on Nokia because I see great value here. I believe Pekka Lundmark is a great CEO and he is doing everything right so far. He is cut throat-per his moves-, he is looking for long term share holders value creating and he is promising to be transparent. He is cutting the fat-trimming the corporate expenses-, creating a lean decision making process, moving accountability solely to division leaders and investing heavily in R&D for technological leadership. I couldn't ask more from him.
Therefore, I am willing to give him time to achieve what he is out to achieve. Based on his conservative guidance, Nokia will get to $8-depending on the US/EUR exchange rate- by mid to late 2022. I am willing to wait that long.
Additionally, once Mobile Networks division gets to 9-10% OM, Nokia will be at $10-12 per share.
Question is do you believe him? If you do, keep investing because there is tremendous amount of value here. If you don't, don't invest or sell your shares. It's that simple. No amount of news will move this stock UNLESS we get two or three quarters of solid earnings reports.
Price target: $10-12 late 2022/early 2023
WILL NOKIA'S SHARE PRICE BE $6.61 OR $8.81 IN 2023 BASED ON NOKIA'S GUIDANCE? Those who believe Nokia will reach its guidance can relax and wait for profits to level up radically. Based on very conservative sales of EUR 21.1B (just below the midpoint of this year's guidance) in 2021-23 and the OM midpoint of the four business groups, this year Nokia's OP would be EUR 1,804.5M ($2,160M) with an OM of 8.55%, while in 2023 the OP would be EUR 2,688.5M ($3,219M) and the OM 12.74% whereas something in-between can be expected in 2022.
If the operating profit is EUR 2688.5 in 2023, the result for the year is acquired by subtracting Nokia's annual long-term debt costs (EUR 250M) and taxes (EUR 350M) will result in a profit of EUR 2088.5M ($2501M). Of this, EPS is $0.44 (2501/5675) and if measured at a moderate P/E of 15, the share price would be $6.61 based on the guided profit for 2023 (i.e. +57% compared to today’s price) and if P/E is slightly a higher 20 (taking into account the expected continuous improvement in earnings in the coming years), the share price would be $8.81 (ie +110% compared to today's price).
CEO Pekka Lundmark also said (in the Q&A session of the CMD) that Nokia targeted even higher margins after 2023. All this means that Nokia is advancing firmly towards being an immensely more profitable company and that we can also reasonably expect the share price to level up very significantly.
My first post after following this forum over the past 12 months (right after buying my first NOK shares).
@ABU First of all: thank you for your DD and the updates you provide us concerning all the new moves Nokia is making.
I also believe that Nokia is way undervallued and this is why:
2019: profit per revenue: 5,24% -------> shareprice was 5,00USD
2020: profit per revenue: 6,66% -------> shareprice is 4,00USD (while the profit per revenue increased by 27%)
2019: EPS (non IFRS) 0,22 euro
2020: EPS (non IFRS) 0,26 euro (increase of 18%)
free cash flow 2019 = - 297million EUR
free cash flow 2020 = + 1.3 billion EUR
So people wanted to pay around 5 dollars a share and now 4 dollars a share, while everything improved in financials. Thats why I believe Nokia stock price should be atleast 5,5 dollars / 4,6 EUR at this very moment. Even if there is not a dividend payment. Who cares about the dividend, really.
Oke last management made mistakes, but hey, the financials improved. But this is just the beginning, because off Pekka Lundmark, I do believe that the company as a whole is going to transcend. And that is only good for the stock price.
After the CMD I even have greater faith in Lundmark's plan, because that is the way to do it. Focussing on the business and eventually the numbers will follow. He is making all the good moves so far and the alliances are getting bigger and bigger. I do believe that he is underpromising and that he will overdeliver.
Getting more funds in R&D is the best move Mr Lundmark could take, because the patentincome (royalty) is just unbelievable. 2020 profitmarging Ebitda per revenue = 85% and due of the fact that this income is taxfree, the bottom line profit is around this same %. That is just amazing. And we all know that NOK just collected a few new contracts concerning that part of the business. Wait until they get an answer for the EU court concerning the "car pattents" from Daimler, then the profit will skyrise.
I don't care if the stockprice isn't going any higher at this moment, because it gives me more time to tank this stock and I do believe that it is going to be worth it.
I would say good luck to you all, that believe in Nokia, but I believe that this isn't necessary because the fundamentals are amazing and the business is improving.
NOKIA AND NCTC PARTNERSHIP BRINGS TAILORED FIBER SOLUTIONS TO 700 CABLE AND BROADBAND OPERATORS. Nokia today announced an agreement with the National Cable Television Cooperative (NCTC) to aid and expedite its member companies’ broadband service rollouts and expansions. Under the terms of the agreement, Nokia will provide NCTC members with tailored fiber solutions and access to premier service programs. Unique in the industry, the Nokia solution also enables a simple upgrade path to 25Gb/s.
NCTC represents more than 700 cable and broadband operators in all 50 United States and its territories. Its members serve approximately 15 million consumers with broadband service across 3,000+ communities, many of which are smaller and located in rural areas. Several NCTC members had winning bids in the Phase I Rural Digital Opportunity Fund (RDOF) auction, receiving awards to bring high speed fixed broadband service to rural homes and small businesses that lack it. In addition to the urgency to provide better connectivity to rural communities, COVID-19-related societal and behavioral shifts are forcing operators to greatly accelerate network upgrades.
Nokia is a recognized leader in fiber broadband with approximately seven out of every 10 fiber homes in the U.S. served by Nokia solutions. The company recently announced reaching the significant milestone of 100 million shipped PON fiber broadband lines globally.
Nokia and NCTC partnership brings tailored fiber solutions to 700 cable and broadband operators
Nokia and NCTC partnership brings tailored fiber solutions to 700 cable and broadband operators
Even a huge contract like that is not moving the needle, what will.
Nokia and NCTC partnership brings tailored fiber solutions to 700 cable and broadband operators
Nokia to provide tailored fiber solutions which help NCTC members be more competitive and bring new services to their market of 15 million Americans
Nokia fiber broadband solutions provide NCTC members with a simple, flexible evolution path to 25Gb/s and cloud-native Software-Defined Networking (SDN)
Nokia broadband solutions help NCTC members better monetize their networks with support for a number of use cases ranging from fiber to the home, to large-scale enterprise applications, to 5G transport
Verizon to launch 5G internet for businesses in 21 U.S. cities (Partnered w/ Nokia)
— 9:30 AM ET 04/15/2021
STOCKHOLM, April 15 (Reuters) - Verizon Communications Inc ( VZ ) , one of the largest U.S. telecom companies, said on Thursday it will launch 5G internet for businesses in 21 U.S. cities this month, expanding its presence from Chicago, Houston and Los Angeles.
Verizon ( VZ) is offering a 10-year price lock for new customers, no data limits and plans ranging from 100 Mbps to 400 Mbps to business users in cities such as Atlanta, Detroit, Las Vegas and San Francisco.
The wireless carrier started rolling out 5G services last year using lower spectrum bands, achieving speeds similar to those of T-Mobile but trailing AT&T ( T ), according to a study
by IHS Market's RootMetrics.
Verizon ( VZ ) plans to expand its 5G business internet footprint throughout the country, bringing its full suite of services from video-collaboration tools to edge computing.
Edge computing uses augmented reality and machine learning to analyse bulk data in the place in which it was gathered - be that on a factory floor or oil rig or in an office - but requires the fast data transfers made possible by 5G.
In its bid to target business customers, Verizon ( VZ ) has also struck
deals with Microsoft ( MSFT ) and Nokia to help clients automate factory floors, lower costs and speed up data traffic through private 5G networks.
So this is pretty cool.
Ernst & Young will essentially add hundreds (or more) salesman to the Nokia brand. They will market and recommend Nokia private network solutions to their clients across the globe.
EY started out as one of the Big Four accounting firms, but they also became a player in technology consulting - so this is a great fit for their relationship with Nokia. They have many large industrial clients around the world and have direct access to the high-level decision makers at these companies.
There is likely no upfront significant expense for Nokia in this arrangement - they just pay commissions when EY signs (or facilitates) customers to Nokia deals.
Just installed T-Mobile 5G Home Wi-Fi. It is the Nokia grey tower and has replaced AT&T Internet 1000. Out of the box I am getting 4 out of five bars connectivity and speeds of 301.28 Mbps download and 64.58 upload which is 3 times better than I was seeing with AT&T Internet 1000 and at $60, a cost savings also over AT&T. It boggles the mind what speeds I could see with 5 out of 5 bars connectivity when the %G rollout is completed.
Institutional accumulating NOK:
File Date Source Investor Opt Avg Share Price Shares Shares Changed
($1000) Value Changed
(%) Cost Basis
2021-04-16 13F Motco 3.75 1,600 0.00 6 0.00
2021-04-15 13F City Holding Co 200 1
2021-04-15 13F Hall Laurie J Trustee 4.00 1,000 0.00 4 0.00
2021-04-15 13F Crossmark Global Holdings, Inc. 3.94 386,051 -2.31 1,529 -1.04
2021-04-15 13F Salem Capital Management Inc 358,800 1,421
2021-04-15 13F New Capital Management LP 21 0
2021-04-15 13F Wolff Wiese Magana Llc 4.16 1,930 60.83 8 60.00
2021-04-15 13F Atticus Wealth Management, Llc 4.00 1,000 0.00 4 0.00
2021-04-15 13F GPS Wealth Strategies Group, LLC 133 0
2021-04-14 13F Westside Investment Management, Inc. 0.00 115 0.00 0
2021-04-14 13F Loring Wolcott & Coolidge Fiduciary Advisors Llp/ma 0 -100.00 0 -100.00
2021-04-14 13F Moody National Bank Trust Division 3.93 86,225 0.00 341 1.19
2021-04-14 13F WealthTrust Axiom LLC 3.93 79,101 18.36 313 19.92
2021-04-14 13F Sound Income Strategies, LLC 1,981.79 1,064 5.98 4,213 105,225.00
2021-04-14 13F Johnson Midwest Financial, LLC 0.00 84 0.00 0
2021-04-14 13F Cypress Capital Group 3.93 15,694 -20.30 62 -19.48
2021-04-14 13F Secure Asset Management, LLC 0 -100.00 0
2021-04-14 13F Global Trust Asset Management, LLC 0 -100.00 0
2021-04-14 13F Veriti Management LLC 3.93 36,983 1.40 146 2.10
2021-04-14 13F CVA Family Office, LLC 4.00 500 0.00 2 0.00
2021-04-14 13F Global Retirement Partners, LLC 4.10 1,411 -49.46 6 -45.45
2021-04-14 13F First Bank & Trust 31 0
2021-04-14 13F Tsfg, Llc 4.00 500 0.00 2 0.00
2021-04-14 13F Farmers & Merchants Investments Inc 3.92 1,021 0.00 4 0.00
2021-04-14 13F Stock Yards Bank & Trust Co 3.92 12,896 0.16 51 2.00
2021-04-14 13F AdvisorNet Financial, Inc 3.95 3,285 17.95 13 18.18
2021-04-14 13F Investors Financial Group, LLC 3.93 510,437 -18.38 2,021 -17.34
2021-04-13 13F Norway Savings Bank 0.00 140 0.00 0
2021-04-13 13F Iron Horse Wealth Management, LLC 29 0
2021-04-12 13F Huntington National Bank 3.90 3,589 0.00 14 0.00
2021-04-12 13F FNY Investment Advisers, LLC Call
2021-04-12 13F Private Capital Group, LLC 4.00 6,256 31.54 25 31.58
2021-04-12 13F HighPoint Advisor Group LLC 0 -100.00 0
2021-04-12 13F Regal Wealth Group, Inc. 143 1
2021-04-12 13F Gateway Advisory, LLC 10,000 40
2021-04-12 13F Valeo Financial Advisors, LLC 3.95 17,436 2.47 69 2.99
2021-04-12 13F Valeo Financial Advisors, LLC Call
2021-04-12 13F FNY Investment Advisers, LLC 493,000 1,952
2021-04-12 13F Calamos Advisors LLC 3.93 1,520,000 0.00 6,019 1.28
2021-04-12 13F Fma Advisory Inc 0 -100.00 0 -100.00
2021-04-09 13F Edge Wealth Management LLC 4.00 2,000 0.00 8 0.00
2021-04-09 13F Selective Wealth Management, Inc. 3.75 800 0.00 3 0.00
2021-04-09 13F Wiley Bros.-aintree Capital, Llc 0 -100.00 0
2021-04-09 13F Carolina Wealth Advisors, LLC 4.12 243 0.00 1 0.00
2021-04-09 13F Flagship Private Wealth, LLC 5.02 600 -40.00 2 -66.67
2021-04-08 13F Foundation Resource Management Inc 3.95 13,790 -96.85 55 -96.79
2021-04-08 13F Larson Financial Group LLC 0.00 64 0.00 0
2021-04-08 13F Baldwin Brothers Inc/ma 25,000 99
2021-04-08 13F Pacifica Partners Inc. 3.95 18,000 119.24 72 125.00
2021-04-08 13F John W. Brooker & Co., CPAs 87.87 200 387.80 1 -85.71
2021-04-06 13F Lowe Wealth Advisors, LLC 0.00 1 0.00 0
2021-04-06 13F Carroll Financial Associates, Inc. 1.90 6,054 4,018.37 23
2021-04-05 13F Advocacy Wealth Management Services, LLC 3.57 560 0.00 2 0.00
2021-04-05 13F Pacer Advisors, Inc. 3.93 144,770 -1.57 573 -0.35
2021-04-05 13F Fulton Bank, N.a. 3.93 12,183 -85.77 48 -85.67
2021-04-01 NP AIM INTERNATIONAL MUTUAL FUNDS (INVESCO INTERNATIONAL MUTUAL FUNDS) - Invesco Oppenheimer Global Multi-Asset Growth Fund Class R6 5,773 28
2021-04-01 NP VEURX - Vanguard European Stock Index Fund Investor Shares [click for advisory] 9,968,211 47,903
2021-04-01 NP PBDM - Invesco PureBeta FTSE Developed ex-North America ETF 2,593 12
2021-04-01 NP VGTSX - Vanguard Total International Stock Index Fund Investor Shares [click for advisory] 75,896,612 364,728
2021-04-01 NP VEU - Vanguard FTSE All-World ex-US Index Fund ETF Shares [click for advisory] 10,163,599 48,842
2021-04-01 13F Private Advisor Group, LLC 4.00 165,889 21.57 649 16.52
2021-04-01 NP VT - Vanguard Total World Stock Index Fund ETF Shares [click for advisory] 2,073,811 9,966
2021-04-01 NP POSKX - PRIMECAP Odyssey Stock Fund 485,800 2,215
2021-04-01 NP PXF - Invesco FTSE RAFI Developed Markets ex-U.S. ETF 445,274 2,144
2021-04-01 NP POGRX - PRIMECAP Odyssey Growth Fund 563,300 2,569
2021-04-01 NP VTRIX - Vangua
Nokia Corporation NOK has joined forces with National Cable Television Cooperative (“NCTC”) to boost the latter’s 700 plus-member base of cable and broadband operators with its industry-leading, customized fiber solutions that can be upgraded up to 25Gbps.
$NOK Will Melissa Schoeb's appt (effective April 12th) w/Nokia Bring a More Positive Outlook When Pekka Speaks on April 29th (Earnings)?
17 March 2020- Nokia announced the appointment of Melissa Schoeb as Chief Corporate Affairs Officer effective from 12 April 2021.
Nokia’s Chief Corporate Affairs Officer oversees Communications, Government Relations, Brand and Sustainability. Melissa has extensive experience in corporate affairs and communication skills. She held a number of sr leadership positions at FleishmanHilliard, one of the world’s leading communications consultancies, was Director of Global Communications for Nortel Networks, a multinational telecommunications and data networking equipment
I Callout Pumpers & Bashers
Happy Friday fellow investors. Green is green. Slowly but surely Nokia is making strides.
This is my first post while connected to the Internet via my T-Mobile 5G Nokia Gateway!
Like this if you like Nokia and their solid relationship with T-Mobile.
SWEDISH BANK HANDELSBANKEN ABOUT ERICSSON. SAYS NOKIA WILL BE A TOUGHER 5G RIVAL THAN IN 2018-2020. Handelsbanken believes that the risks of negative "triggers" in the Ericsson share in the short term will overshadow the positive ones. It appears from an analysis where the bank downgrades Ericsson to HOLD, from previous BUY, but raises the target price to SEK 130, from the previous SEK 120. The joy ride is expected to lose momentum in the coming year, which is an investment year for the company, according to Handelsbanken.
As one of the main positive triggers for the share, the recovery in Digital Services, is not expected before the second half of 2021, Handelsbanken believes that the 50% price increase in Ericsson over the past twelve months is an opportunity to hedge certain gains while retaining a certain share. for further travel towards the bank's new higher target price. For the first quarter, Handelsbanken sees a risk of negative exchange rate effects and expects a real currency headwind in sales. Other uncertainties are the outcome of the ongoing patent dispute with Samsung and the extent of the negative impact on Cradlepoint's earnings and the 49% share in Mediakind. The result of the ongoing 5G procurement in China is also uncertain, according to the analysis.
Ericsson is still a global leader in the market in terms of size, quality and number of 5G contracts won, writes the bank, which also notes that the underlying demand in the market is strong. At the same time, Handelsbanken believes that NOKIA will be a tougher 5G rival in the coming years than the company has been during the period 2018-2020.
Translated from Swedish:
I Callout Pumpers & Bashers
Loving this news.
Nokia Corp. NOK has announced that China Mobile Cloud will deploy Nuage Networks’ Software-Defined Networking (SDN) solution for the nationwide deployment of its public cloud service. China Mobile Cloud is the subsidiary of China Mobile, the leading mobile telecom service provider
RELAX - NOKIA IS PROFITABLE AND WILL BE MUCH MORE SO. Those who believe Nokia will reach its guidance can relax and wait for profits to level up radically. Based on very conservative sales of EUR 21.1B (just below the midpoint of this year's guidance) in 2021-23 and the OM midpoint of the four business groups, this year Nokia's OP would be EUR 1,804.5 ($2,160M) with an OM of 8.55%, while in 2023 the OP would be EUR 2,688.5M ($3,219M) and the OM 12.74% whereas something in-between can be expected in 2022. Pekka Lundmark also said Nokia targeted even higher margins after 2023. So the trolls can produce hot air at leisure but Nokia is advancing firmly towards being an immensely more profitable company.
Ahhh, PekkLund’s stomping ground :)
So many partnerships and networking in this area.
GSMA, in fact, had projected Asia-Pacific to be the world's largest 5G region by 2025, hitting 675 million connections--or more than half of the global volume. The industry group, though, had revised its 2020 projection of 5G connections to be 20% lower than its previous forecast, due to the global pandemic.
IS NOKIA'S GUIDANCE FOR 2023 TOO CONSERVATIVE?
I counted the operating profits (OP) for 2021 and 2023 based on the midpoints given for the operating margins (OM) per business group. This gave the following margins:
2021 *** 0.5% *** 8.5% *** 4.5% *** 75%
2023 *** 6.5% *** 10.5% *** 9.5% *** 75%
I then entered the sales figures for 2020 but so that I rounded the sales of Mobile Networks down from EUR 10.3B to EUR 10B and rounded the Cloud and Network Services down to EUR 3B which gave sales of EUR 21.1B which is just slightly below the midpoint (EUR 21.2B) of Nokia's sales guidance for this year which is EUR 20.6B to 21.8B.
With these assumptions we get OPs (in euro) of
2021: *** 50M *** 569.5M *** 135M *** 1050M *** 1,804.5M
2023: *** 650M *** 703.5 mrd *** 285M *** 1050M *** 2,688.5M
This gives a OM of 8.55% in 2021 (1,804.5M/21,100M) which is well in line with the midpoint of the guidance (8.5%) while the OM for 2023 would reach 12.74% (2,688.5M/21,100M) and be way above the guided midpoint of 11.5%.
And even the tentative OP of 2,688.5M in 2023 may be too low (and the OM of 12.74% thus equally too low) for the following reasons:
1) I did not include sales growth for 2023, although Nokia explicitely said said it was aiming for faster growth than the market in 2023.
2) The licensing business group Nokia Technologies may also experience some sales growth due to a couple of new deals (Samsung and Lenovo) and if the automotive industry and IoT applications increasingly start paying for Nokia patents. 5G phones are another promising source still difficult to quantify.
3) HIGH OM WITHIN GUIDANCE: Should the business group OMs instead of being at the midpoint of guidance (which I used in the calculation above) be higher than that, this too would raise the OP in 2023.
4) OM GUIDANCE EXCEEDED: Finnish Nordea Bank considered it possible for Mobile Networks to reach the long term target OM of 10% or more already in 2023, so there may be a surprise in this area as well.
CONCLUSION: The guidance for 2023 is very conservative. I would not be surprised if the guidance were raised to 2023 at the same time as the 2022 guidance is given.
Mr Lundmark is the right CEO at the right time for Nokia. With his past experience and his networking/relationships will help to benefit Nokia's future. Couple this with Nokia technologies, Nokia Bell Labs and the Nokia Team, the future is bright.
All the recent news & wins for Nokia aren't moving the stock as Investors wait to see results.
It will take Nokia beating Q1 2021 revenue & earnings guidance on April 29th for the stock to go higher. In addition, the YoY comparables to Q1 2020 are in Nokia's favor and could garner some attention. Remember that Nokia received a $500M prepayment from a customer (believed to be TMUS) in Q4 2020 that will be recorded as revenue in Q1 2021.
My prediction is Nokia will deliver 5.4B EUR in Q1 2021 which will be a 10% increase YoY vs. $4.9B EUR in Q1 2020. Delivering a profit, positive EPS, and positive cash flow, Nokia will see upgrades and a more comparable valuation to Ericsson at close to 2X revenue.
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