Nokia: Too Cheap to Ignore

Nokia (NOK) shares have become “too cheap to ignore,” according to Mark McKechnie of American Technology Research, who Wednesday raised his rating on the stock to Buy from Neutral, setting a $22 price target.

McKechnie says the street has factored in the macro impact on handsets as well as the competitive threats from the Apple (AAPL) iPhone and the Research In Motion (RIMM) BlackBerry. While the next two quarters “remain challenging,” he sees demand beginning to recover in the 2009 second half. “We may be early, but view current valuation as too low and pessimism too high to ignore,” he writes, noting that the stock trades at 7x estimated calendar 2008 EPS, with a dividend yield of 4.9%.

NOK Wednesday closed down 32 cents or 2% at $15.69.

Comments

[andyn:]

Well they said that around $23 too.
NOK has too much competition at the higher end from RIMM, AAPL, and GOOG.

It has hence focused on the lower end with lower margins.

I think this is dead money for atleast a year till the world economy stabilizes.

Better to buy AAPL and GOOG which atleast have some growth in this economy

2008 Oct 30 09:40 AM

[Dividends A...:]

Its scale that gives Nokia the advantage over competition. Yes RIM & Apple have made significant inroads in North America with their products, but if you're an international investor and have been overseas to countries throughout Asia Nokia has a dominant presence. They will lose market share, but currently RIM & AAPL only compete on the high end where margins are being compressed. On the lower end there are many consumers who don't want or need the excessive functionality of a smartphone and the margins are stable and/or increasing in that product segment.

2008 Oct 31 12:53 PM