In a research report published on Wednesday, BMO Capital analyst Tim Long reiterated an Outperform rating on shares of Nokia Corp (ADR) (NYSE:NOK) with a price target of $7.00, after the company announced a patent licensing joint venture with Samsung. Shares of Nokia are currently trading at $5.89, up $0.30 or 5.46%.
Long noted, “We believe this new deal as a meaningful positive for NOK […] When the arbitration terms were disclosed on February 1, 2016, we talked about lowering our run rate technologies revenues by EUR 70 million, so this add on basically brings Samsung back to where we had been modeling. Since the stock fell 10% on the February and further in subsequent days, we expect some bounce back.”
“We make no changes to EPS at this time, but expect Technology revenues to provide a boost when Q2 earnings are reported. We reiterate our Outperform rating and US$7 price target as we believe restructuring benefits will exceed expectations, and the multiple could expand as the outlook for the more profitable IPR revenues improves,” the analyst concluded.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Tim Long has a yearly average return of 4.1% and a 53% success rate. Long has a -25.2% average return when recommending NOK, and is ranked #906 out of 4055 analysts.
Out of the 17 analysts polled by TipRanks, 13 rate Nokia stock a Buy, while 4 rate the stock a Hold. With a return potential of 34%, the stock’s consensus target price stands at $7.83.