Here's Nokia's Long-Term Earnings Potential, According To Canaccord

In a report published Monday, Canaccord analysts T. Michael Walkley and Siddharth Sinha comment on Nokia Corporation (ADR)'s NOK long-term earnings potential. The specialists attended the company's press and analyst event at MWC and hosted an investor meeting with Ramzi Haidamus, President of Nokia Technologies.

Walkley and Sinha maintain their "positive long-term thesis given the long-term growth potential for all three divisions and increasing cash returns longer term." They believe "the Networks business is well positioned to maintain strong margins and drive solid cash flows." This, "combined with the longer-term potential for materially larger and higher margin licensing revenue and HERE sales," makes them think that "Nokia shares represent an attractive long-term investment opportunity."

Cannacord maintains a Buy rating on shares of Nokia, accompanied by a $12 price target. The firm believes the company's "current guidance licensing revenue would grow in 2015 from the current €600M annual run-rate excluding the Samsung arbitration outcome understates the long-term potential for this business unit now that Nokia no longer will cross license its own mobile device business." They think that "the Samsung arbitration ruling in 2015 and new initiatives to monetize patents provide strong longer-term high-margin growth opportunities."

Finally, the analysts also anticipate sustained strong margins in Networks, with growth slightly above the industry's average, and robust long-term sales growth with margins expanding in the HERE division.