Nokia Earnings: Unsurprising Poor Results With Hints of Optimism and a Buyback to Boost Stock

It did not take much for Nokia’s stock to pop, considering how bleak performance had been throughout 2023. Management was less dour than it had previously been and expects a sales pickup in the second half of 2024. With a large net cash position and a cheap stock, the firm also initiated a EUR 600 million buyback that it intends to complete within two years. We don’t expect stellar performance from Nokia, but we don’t believe 2023 was reflective of the firm’s normalized potential. With rival Ericsson sitting in the same boat and global fixed and mobile network investment still required as data usage grows rapidly, we expect significant improvement over the next few years despite our view that Nokia has no moat. We are maintaining our EUR 5.50 fair value estimate and think the stock remains undervalued.