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Research Alert: CFRA Maintains Hold Opinion On Adss Of Nokia

05/10/2021 20:38

12:35 AM EDT, 05/11/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We raise our 12-month target price by USD1 to USD5, reflecting a 2021 EV/EBITDA of 8x. This is below its main rival Ericsson's 10x multiple, justified by Nokia's poorer business execution. Q1 2021 EBIT of EUR551 million strongly beat consensus estimates of EUR135 million due to higher revenue growth, stronger gross margin and lower opex. However, we think it is better to wait at sidelines as we still see several lingering headwinds. Q1 2021 total sales were strong due to Network Infrastructure's exceptional sales, particularly driven by North America and China. We do not think it is sustainable, not to mention 5G competition in Mobile Networks remains intense. 10.9% EBIT margin was commendable, but Nokia expects EBIT margin to trend lower as R&D expenses kick in. As a result, Nokia maintains its 7%-10% EBIT margin target for 2021, though it is more comfortable to reach the higher end now. We raise 2021 and 2022 EPS to EUR0.23 (from EUR0.20) and EUR0.27 (from EUR0.23) to reflect the guidance.