Nokia Says It’s Unaware Of Reason For Share Rally; Street Sees 33% Downside
Shares of Nokia popped more than 38% on Jan. 27, taking their gain over the past five days to a whopping 55%.
That said, the stock is down almost 10% in Thursday’s pre-market trading session after Nokia (NOK) put out an official statement saying that the Finnish telecom firm is “not aware of any material, undisclosed corporate developments or material change in its business or affairs that has not been publicly disclosed that would account for the recent increase in the market price or trading volume of its shares.”
Nokia joins a string of large corporates, including Blackberry and GameStop, who have recently experienced a steep share rally, for no apparent fundamental reason.
The Finnish telecom firm is scheduled to release its fourth-quarter and full-year 2020 results on Feb. 4. Shares of Nokia last year dropped to a multi-year low as Verizon replaced the company as its 5G supplier in the US and chose Samsung as one of its main suppliers of radio equipment.
The stock has more than recouped all of its losses and is now up 65% over the past year. Looking ahead, the average analyst price target of $4.37 implies downside potential of 33% over the next 12 months.
DNB Markets analyst Frank Maao double downgraded the stock to Sell from Buy due to its valuation. Maao maintained a price target of $4.84 and called the recent share bonanza “bubble-like behavior.”
Meanwhile, the rest of the Street is cautiously optimistic on the stock. The Moderate Buy consensus rating is split between 4 Buys, 6 Holds and DNB’s Sell. (See Nokia stock analysis on TipRanks)
News sentiment around Nokia over the last seven days has been bullish, with 100% of the articles published being positive, compared to a 65% bullish sector average.
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