Deutsche Bank Calls Nokia A 'Value Trap,' Shares Down 3.5%

Shares of Nokia

trading on the NYSE are down 3.5 percent Tuesday morning as investors in the name seem to be digesting a research note from Deutsche Bank's Kai Korschelt and Johannes Scheller. The analysts call Nokia a "value trap" and highlight several points:

The bulletpoint for the expecting upcoming momentum trend seems to be the most concerning: "Following the recent buy-in, NSN is now the major earnings driver of Nokia. Our analysis suggests that NSN's exposure to slowing high-margin Capex at ‘early LTE adopter' carriers in developed Asia and limited growth prospects in the US & Europe suggest that Gross Margins have peaked and revenue declines continue. We see NSN's LTM EBIT ‘rolling over', increasing the possibility of another restructuring that may cost up to E600m. In Devices/D&S, rising competitive pressure in both high- and low-end could slow Lumia's modest market share gains achieved in the last 12 months. Mobile Phones (16% of group Gross Profit/43% of D&S) will likely continue their double-digit declines due to smartphone cannibalization of this segment. " Deutsche Bank maintains a Sell rating and €2.20 price target on shares of Nokia.