Nokia

The Windows 8 phones are one of the most-awaited products of this year, the anticipation is more to assess how well they perform in the market, and less for the actual gadget. The performance of WP8 will be a deciding factor for the Finnish mobile company, Nokia Corporation (NYSE:NOK). We are presenting two equally recent but contrasting analyst opinions of the Nokia stock:

The Bearish Thesis

This one comes from Skandinaviska Enskilda Banken (SEB) , a Nordic investment bank’s equity research. Mats Nystrom, the lead analyst, clearly sees nothing in Nokia’s business history that warrants any major change with the release of new Windows 8 powered phones, and suggests that market success at large depends on the brand perception, rather than the actual value, a factor that is decidedly not in favor of Nokia Corporation (NYSE:NOK).

The analysis persists on its ‘Hold’ rating of Nokia shares, notwithstanding the current valuation of EUR 2.3. The SEB maintains its target price of EUR 1.8, and believes that Nokia Corporation (NYSE:NOK) has to sell at least 36 million units of the Lumia WP 8 in 2013 to make a passable recovery.

The shares rallied about 60 percent since the Q2 earnings report. The quarterly report was primarily just bad news and the upward trend is only due to anticipation of WP8, insider trading, and rumors that Nokia might be acquired. The analysis predicts a downward trend in shares once the Q3 earnings come in focus and is equally unexcited about the Q4 outlook.

Share Price Graph ESB

Moreover the Finnish company would be facing increased competition, as the new iPhone by Apple Inc. (NASDAQ:AAPL) is released next month. The company has progressively loss market share in the smartphone industry. the global smartphone market was up 43 percent on a year on year basis, while Nokia Corporation (NYSE:NOK)’s declined by 48 percent.

Smartphone Market Share SEB

The Bullish Thesis

The recent news of Microsoft Corporation (NASDAQ:MSFT) and Nokia Corporation (NYSE:NOK) teaming up with the top wireless carrier Verizon Communication Inc  (NSYE: V) has generated at least one long awaited bullish analysis of Nokia Corporation (NYSE:NOK)’s stock, and this one is by ABG Sundal Collier, another Nordic investment bank. The analysis predicts that Verizon striking a deal with Nokia points to the wireless provider’s ‘faith’ in the Finnish company and will provide Nokia with the a much needed exposure in the North American market. If Nokia is able to hang onto even 15 percent of Verizon’s sales, that translates to 4 million units shipped in 2013.

Verizon Smartphone Sales

Nokia’s phones have been distributed by AT&T Inc. (NYSE: T) and T -Mobile in the past years. Verizon is the largest wireless carrier in the US.

Tags: