Analyst Tim Long of BMO Capital gave his take on Nokia Corp (ADR) (NYSE:NOK) following its second quarter earnings report. Nokia’s earnings were mostly in-line with revenues of €5.7 billion and EPS of €0.03. Comparable sales declined 11% YoY, with weakness in its Mobile and Applications sub-segments. Additionally, Nokia reported gross margin and operating expenses in line with estimates while tax levels stayed elevated.

Long expects to see full-year Networks operating margin at 7-9%. His 2016 EPS is unchanged at €0.18 and he increased his 2017 EPS estimate from €0.29 to €0.31.

Long, despite challenges in the market, likes Nokia’s stock “because of management’s commitment to find synergy upside.” Furthermore, Nokia’s €1.2 billion savings projection beat the analysts estimate. He believes that Nokia may find even more ways to save as its integration progresses.

Investors are worried about Nokia’s contract with Apple expiring, but Long believe it gives the company “an opportunity to renegotiate to more favorable rates, particularly following the favorable Samsung deal and Ericcson’s transaction with Apple.”

Long reiterates his Outperform rating with a price target of $7, marking a 28% increase from current levels.

According to TipRanks, the analyst has a yearly average return of 5.7% and a 57% success rate. The analyst has a 22% average loss when recommending NOK, and is ranked #656 out of 4,101 analysts.

TipRanks shows that out of the 9 analysts who rated NOK in the last 3 months, 78% gave a Buy rating and 22% gave a Hold rating. The average 12-month price target for the stock is $6.64, marking a 21.39% upside from current levels.

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