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Nokia Oyj ADR NOK

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Morningstar’s Analysis

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Economic Moat


Capital Allocation


Nokia’s 5G Footprint Losses Expected to Weigh on 2021; Maintaining EUR 3.80 FVE

Mark Cash Senior Equity Analyst

Analyst Note

| Mark Cash |

No-moat Nokia’s 5% year-over-year revenue decline and adjusted EPS of EUR 0.14 came in ahead of FactSet consensus estimates. However, the results are overshadowed by a challenging 2021 for its mobile access business. Its core competency is expected to significantly decline in 2021 due to not converting 4G customers to 5G offerings and price pressure in North America. Alternatively, Nokia expects growth from the network infrastructure and the technology groups to help offset some of the headwinds in mobile networks. While we are not encouraged by Nokia’s 5G market share losses in North America, we expect Europe to offer an opportunity for Nokia to retrench its overall position as buildouts proliferate. Nokia will not pay a dividend for 2020 and will provide an update regarding the dividend at its capital markets day in March. As a leaner organization extracting product costs and an improving operating profile, we are maintaining our EUR 3.80 fair value estimate and increasing the U.S. ADRs to $4.60 because of foreign exchange.

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Company Profile

Business Description

Nokia is a leading vendor in the telecommunications equipment industry. The company's network business derives revenue from selling wireless and fixed-line hardware, software, and services. Nokia's technology segment licenses its patent portfolio to handset manufacturers and makes royalties from Nokia-branded cellphones. The company, headquartered in Espoo, Finland, operates on a global scale, with most of its revenue from communication service providers.

Karakaari 7
Espoo, FI-02610, Finland
T +358 104488000
Sector Technology
Industry Communication Equipment
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type
Employees 92,039