Is Nokia a buy or sell in April?

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Mar 22, 2021
  • Nokia has signed a five-year deal with AT&T
  • Nokia raised its 2021 guidance
  • If the price jumps again above $4.5, the next target could be around $5

Nokia shares have advanced above $9.5 level in January 2021, mainly due to bullish talks from the popular Reddit WallStreetBets forum. The current price of the stock stands around $4, and according to analysts, shares of this company show potential for patient investors.

Fundamental analysis: Nokia continues to expand its business

Nokia Corporation is a Finnish multinational telecommunications, information technology, and consumer electronics company that operates across over 100 countries. Nokia continues to expand its business, and according to the latest news, it has signed a five-year deal with AT&T.

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Under the agreement, AT&T will implement Nokia’s C-Band portfolio to raise network capacity and to support both indoor and outdoor 5G coverage. This March, the company announced that it had signed a patent license agreement with Samsung for video standards.

“We are delighted to have reached an agreement with Samsung which further validates Nokia’s decades-long investments to R&D and contributions to multimedia and video technology standards,” said Jenni Lukander, President of Nokia Technologies.

Nokia also signed a deal with Microsoft to develop private wireless use cases designed for enterprises. Nokia will combine its mobile network solutions with the Azure Private Edge Zone which is used for ultra-low latency applications.

Nokia raised its 2021 guidance while the board of directors announced a clear and detailed plan to accelerate competitiveness and scale-up the lead in the markets. Each business group will focus on capital allocation and technology leadership which will position this company to grow profitably in 2021 and beyond.

“Nokia is repositioning itself to deliver sustainable, profitable growth, adapting our business to lead in an increasingly digitalized world. This plan will enable us to deliver double-digit comparable operating margins in 2023 and scale up our lead in the markets we choose to play in, said Pekka Lundmark, President, and CEO of Nokia.

It is also important to say that Nokia announced plans to cut up to 10,000 jobs over the next two years period. This is part of a new restructuring politic, and the measures should cut $700M off Nokia’s cost base by the end of 2023.

This company’s fundamentals are not bad, and with the market capitalization of $23B, Nokia is reasonably valued relative to the competition. Nokia reported solid Q4 results in February, and according to analysts, shares of this company show potential for patient investors.

Technical analysis: $4.5 represents the first resistance level

Data source: tradingview.com

Nokia shares are currently trading above the $4 support level, and if the price jumps again above $4.5, it would be a signal to buy shares, and the next target could be around $5. On the other side, if the price falls below the $3.5 support level, it would be a firm “sell” signal, and the next target could be around $3.

Summary

Nokia continues to expand its business, and according to the latest news, it has signed a five-year deal with AT&T. With a market capitalization of $23B, Nokia is reasonably valued, and shares of this company show potential for patient investors.

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