JPMorgan Cazenove – a JPM European subsidiary – raised its target on Nokia Corporation to $10.50 from $9.40 per share. The firm believes that Nokia will benefit from euro weakness and a favorable arbitration decision against Samsung, two catalysts that will propel the stock 25 percent higher by the end of the year.
Simultaneously, JPMorgan said that while Q4 margins should decline, it will not decline as much as the market currently forecasts – providing Nokia the ability to beat on earnings when it reports on January 29.
Into the future, Nokia will be able to renegotiate contracts in order to move from fixed-price deals to direct licensing deals that may provide a 1 percent royalty. JPM sees Nokia earnings flat this year with adjusted EPS of 0.27 euros, while earnings in 2016 will rise 11 percent to 0.30 euros.
In premarket activity, NOK is trading 2.5 percent higher
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