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.