Analyst Note
| Mark Cash |No-moat Nokia’s second-quarter results were largely in line with our expectations, after the company announced that it planned to raise full-year guidance a week ago. We are raising our fair value estimate to EUR 4.90 from EUR 4.60 (to $5.80 from $5.40 for the U.S. ADRs) because of the stronger performance potential in network infrastructure products and for Nokia’s mobile network solutions to gain as component shortages and geographical restrictions affect the market’s largest player, Huawei. Additionally, we believe that simplifying the operational model to each division being solely responsible for its results and reducing product costs for 5G solutions should keep Nokia’s adjusted operating margins in the low-double-digit range for a sustainable period. Shares traded up on the upbeat outlook, which we view as mostly fairly valued.