Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) is worth much more than what its shares are currently trading at, according to analysts at Trefis. They have a $4.85 per share target price for the company, equating to an $18.1 billion market capitalization. With the value at which Nokia shares are currently trading, it has a $15 billion market cap.

Nokia

Using a sum of the parts valuation, the analysts estimated that Nokia Siemens Networks makes up 36% of Nokia Corporation (NYSE:NOK)’s stock price, while Emerging Markets Mobile Phones makes up 14%. Navteq, now known as HERE maps, makes up 11% of their estimate.

Windows Phone mitigates Nokia’s decline

The analysts note that Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s mobile phone share in emerging markets has been falling over the last few years and could decline from 22% in 2011 to 16% by the end of their forecast period. However, they said Windows Phone is preventing the company’s market share from falling faster because its Lumia phones are popular. They said the key is going to be whether the gains from Windows Phone will be able to take over from the losses the company has suffered using the Symbian operating system.

The analysts see a 6% downside to their estimate if Nokia’s market share falls to about 10% by 2019, although they also see a 13% upside if Windows Phones help the company turn things around.

Nokia’s margins must recover

Trefis analysts are still modeling Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s mobile phone margins to decline. They’ve fallen from 20% in 2007 to a negative 2.5% last year. They believe in the near term that margins will continue to fall, but by 2019, they’re projecting margins to be at 8% because at that point the company’s cost cutting measures should start paying off and Windows Phone should be more prominent.

They see a 20% downside risk if margins only increase to 4% by 2019.

Nokia could continue penetrating developed markets

They also note to a significant decline for Nokia in developed mobile phone markets. The company’s mobile phone prices in these markets have fallen and will likely continue to fall from €70 to €65 by the end of 2019. However, the company may be able to push prices higher thanks to its Windows Phones. They sees a 5% upside to their price estimate if the company can raise its average prices to €100 by 2019.

Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s market share in developed markets has also been falling, but they believe it will stay flat from now on. They believe the company’s success depends on whether its Lumia phones can fully replace BlackBerry as the third place mobile ecosystem. There are signs that this is already happening, but they see a 10% downside if the company’s market share in developed markets falls to 5% by 2019.

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