Nokia Oyj (ADR) (NYSE:NOK) reported first-quarter revenue slightly above consensus estimates and non-IFRS EPS consistent with consensus. Highlights from the quarter included stabilizing results in North America, strong results and margins in Mobile Networks, and a favorable geographic and product mix positively driving strong overall gross margin.
While Nokia is making progress in regaining its footing, Oppenheimer analyst Ittai Kidron remains cautious on shares. Kidron emphasized his neutral stance on NOK, reiterating a Perform rating on the the stock.
To the company’s credit, the analyst highlights several positives including signs of stabilization in mobile networks, improving win rates, and good new deal momentum. Kidron also views Nokia’s end-to-end portfolio leverage and strong 4.5-5G positioning as long-term positives vs. its completion. “We’re encouraged by the steady execution, mobile order momentum, and unchanged guidance. We see these as good signs that Nokia’s regaining its footing,” the analyst added.
However, “We’re maintaining our Perform rating with 2017 still a mixed bag, noting Fixed Networks and IP/Optical Networking are under pressure, regional trends are mixed, and Apple litigation resolution looking like a multi-year process.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Ittai Kidron has a yearly average return of 2.0% and a 53.5% success rate. Kidron has a -13.4% average return when recommending NOK, and is ranked #1455 out of 4571 analysts.
Out of the 18 analysts polled in the past 12 months, 10 rate Nokia stock a Buy, 7 rate the stock a Hold and 1 recommends Sell. With a return potential of 6%, the stock’s consensus target price stands at $6.04.