Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) agreed to sell its Devices and Services business to Microsoft Corporation (NASDAQ:MSFT) this morning for 3.8 billion euro, and analysts are scrambling to value the company in the wake of the deal. Deutsche Bank analysts Kai Korschelt and Johannes Schaller upgraded the stock to Hold in a report released this morning.

Nokia

The analysts are still waiting to properly value the new Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V), but they are much more optimistic about the company’s future since this morning’s news was reported. The lack of a proper valuation on the company lead the analysts to speculate that the stock could hit 4.50 euro per share.

Nokia acquisition valuation

This morning’s deal will see Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) divest itself of its handset business for 3.8 billion euro, and agree to a ten year wireless patent licensing deal for 1.65 billion euro. That brings the total worth of the deal to 1.44 euro per share in cash, close to half of what Nokia shares were trading at when the market closed on Friday.

The Devices and Services had been burning around 600 million euro in cash every quarter as Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) struggled to capture the volume it wanted in the smart phone market. With that 600 million boon to free cash flow, Nokia has many more options ahead of it, brought on by a much healthier set of accounts.

The analysts’ base valuation relies on earnings from other Nokia Corporation business while adding in the cash garnered from this deal. With a 12x multiple, the analysts think that the company could trade for as much as 4.4 euro per share down the line.

Microsoft is changing, but not that much

the talks between Microsoft Corporation (NASDAQ:MSFT) and Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) have been going on for months, with a report in June confirming that Microsoft Corporation (NASDAQ:MSFT) had almost bought the Nokia handset business earlier this summer.

Microsoft recently announced that it was going to replace Steve Ballmer at the head of the company. Much of the speculation about that decision gave Ballmer’s failures in the smartphone and tablet businesses as a plausible reason for his departure from the company. This morning’s deal means that either Ballmer still has considerable control of the company in his final days, or Microsoft is not going to change all that much.

If Steven Elop, the Nokia CEO who is heading to Microsoft Corporation (NASDAQ:MSFT), is really a front runner to take charge at the company, Microsoft may still be trying to be a consumer-facing business. This morning’s deal saw the company’s shares drop more than 6% of their value.