Nokia Corporation (ADR) (NYSE:NOK) received a buy rating from analysts at Carnegie Research citing that the company’s first quarter earnings report showed many positive signs. Its price target for the stock is €4.50 per share.

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Carnegie research analysts, Matti Riikonen and Bruce Diisen, emphasized that the first quarter earnings results of Nokia Corporation (NYSE:NOK) exceeded consensus estimates by €0.02 per share and its net cash increased by €120 million sequentially from €4.36 billion to €4.48 billion. The analysts also noted that the Finnish smartphone manufacturer recorded lower restructuring-related costs during the period.

In addition, Riikonen and Diisen emphasized that Nokia Corporation (NYSE:NOK)’s NSN once again outperformed and the company’s guidance exceeded expectations. Furthermore, the analysts emphasized that the number of Lumia smartphone units shipped during the period was in line with the consensus and its outlook for the second quarter beats consensus expectations. During the quarter the company sold 5.6 million smartphone units, and its gross margin in smart devices climbed from 18 percent to 20.7 percent q/q with Windows phone 8 showed “somewhat higher” gross margin than average smart devices.

Despite the above positive signs noted by Riikonen and Diisen, investors were disappointed and the stock price of the company plunged as much as 12 percent in the New York Stock Exchange in the pre-market trading yesterday. The shares of Nokia Corporation (NYSE:NOK) is trading around $3.09 per share, down by nearly 3 percent on Friday around 12:37 PM in New York.

In their research note to investors, the analysts also noted that the underlying negative factor affecting Nokia Corporation (NYSE:NOK) was the 9 million volume miss and ASP decline in mobile phones, which is considered as the company’s stronghold in its business.

Riikonen and Diisin opined, “The market does not appear to appreciate that the volume problem can be fixed by new devices coming to the market soon. We think this lack of trust- and the smartphone volume potential that we see in Q2- creates a buying opportunity.”

The analysts added, “At EUR2.4 per share, Nokia EV is EUR 5.6bn after reducing current Eur 4.5bn net cash by EUR 0.8bn for remaining cash outlays related to restructuring. Annualized EBIT based on a seasonally weak and far from perfect Q1 is EUR 524mn, adjusted for the reserved inventory allowance of EUR50mn. This is an EV/EBIT of 10.7x for a company that is emerging from deep restructuring, has shown early progress in the smartphone business, and is launching its most promising products…”