Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) is still in trouble, if analysts at Deutsche Bank are to be believed. They call the company a “value trap” and said it appears as if the company’s gross margins have peaked and revenues are declining. As a result, they see “unfavorable risk / reward” in Nokia.

Nokia

Nokia still burning cash

Analysts Kai Korschelt and Johannes Schaller issued a research note to investors saying that the bullish scenarios provided through a sum of the parts are “too optimistic.” They said another restructuring could be in the company’s future, and the cost of that restructuring could add up to about €600 million.

The analysts said in addition to restructuring costs, Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s E1 per share in net cash could run out by the end of next year, largely thanks to the ongoing cash burn in the company’s Devices segment. They said once that cash runs out, the major value angle to the stock disappears.

Nokia Siemens Networks now the big driver

The analysts say Nokia Siemens Networks is the company’s big earnings driver after the buy-in, which they see as a significant problem for the Finnish company. They believe that Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s gross margins have peaked because of NSN’s exposure to high margin capital expenditures at “early LTE adopter carriers in Asia.” The restructuring they expect to see would be the result of NSN’s LTM earnings before interest and taxes rolling over.

The other big reason they see for peaking gross margins at Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) is the company’s limited growth prospects in the U.S. and Europe. They said increasing pressure from competition in both high and low end devices will likely slow the modest share gains of Nokia’s Lumia line. In addition, they expect to see the company’s feature phones continue its double-digit declines as smartphones cannibalize feature phones.

Deutsche Bank analysts maintained their Sell rating and €2.20 per price target on Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V).