Friday, October 19, 2012

Nokia Corporation (NYSE:NOK): Despite Earnings Beat, Analysts Are Not Impressed

Nokia Corporation (ADR)(NYSE:NOK) did report quarterly earnings that surpassed street expectations but the markets are not going to be appeased by just figures.

The Finnish handset maker has to convince analysts and investors that it is capable of making inroads into the marketshare of Apple and Google before they can be induced to invest their faith and money into the Nokia stock.

Forbes, in an analysis, said that so far there was little evidence of that happening.

It listed out what a few analysts are saying about the company.

Will NOK Hit $5 This Year? Find Out Here

Bernstein Research analyst Pierre Ferragu maintains his Underperform rating and $1.56 target price. “In the Smartphone market, characterized by ‘winner-take-all’ dynamics for ecosystems, we do not see material room for Windows Phone 8,” he writes. “Longer term, with a focus exclusively on this operating system and a dying feature phone market, Nokia is unlikely to drive more than 12 cents of earnings in 2015 after painful rounds of restructuring.

T. Michael Walkley of Canaccord Gentuity maintained his Hold rating on the stock and has raised his target price to 43 from $2.80. “Nokia’s visibility remains limited for its business units and modelling 2013 is challenging due to the uncertainty of how long Nokia can maintain a profitable Mobile Phones business unit given increased low-end smartphone competition, the uncertainty of whether Windows can become a viable third ecosystem with the Windows 8 launch and whether Nokia can turn Smart Devices into a profitable business segment, and the uncertainty of how sustainable the improved margin trends are for NSN in 2013.”

Nomura analyst Stuart Jeffrey kept his Neutral rating on the stock. Windows Phone prospects remain unclear as the latest phones are still to launch. We see little scope to read much into Q4 results and see a risk that Windows Phone disappoints in [the 2013 first half] if Windows 8 traction remains weak, adoption of which we believe remains key to successful pull-through of Windows Phone 8 demand.”

Nokia shares have slumped 7% since reporting earnings.

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