Nokia "AI Tailwinds Are Real, but Much of the Upside Appears Priced In"

Research evidence excerpt

Nokia "AI Tailwinds Are Real, but Much of the Upside Appears Priced In"

2/27E 0.42 0.38 -9 0.41

investor attention, the commercial benefits for Nokia remain unclear and do little to 12/28E 0.48 0.46 -5 0.48

address the sector's broader challenge of monetising traffic growth. Longer term, we

also see LEO satellites as a potential source of disruption for parts of the fixed wireless Francois-Xavier Bouvignies

market. Analyst

francois.bouvignies@ubs.com

+44-20-7568 7105

3. SOTP suggests limited further upside

Harry Blaiklock, CFAWe use 2027E as our valuation year for the SOTP analysis given the market is

Analyst

increasingly focussed on the growth prospects in the AI/Cloud business. We see limited

harry.blaiklock@ubs.com

upside to the current share price, suggesting much of the progress in this business is +44-20-7568 5385

already in the price. Our SOTP valuation has come down since our last update, largely

driven by the de-rating of the network infrastructure peer group, with the average down

from 20x EV/EBITDA to 18x.

Forecast changes

We decrease our 2026–30E EPS forecasts by c.5–10%, driven by lower revenues than

expected.

Valuation: €9.65 DCF-based price target (WACC 9.5%, g 2%)

Our price target decreases to € 9.65 from €11 to reflect our EPS changes.

Highlights (€m) 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E

Revenues 22,258 19,220 19,479 20,717 22,074 23,405 24,714 25,970

EBIT (UBS) 2,375 2,527 2,094 2,498 2,853 3,405 3,828 4,282

Net earnings (UBS) 1,608 2,077 1,635 1,999 2,102 2,516 2,834 3,174

EPS (UBS, diluted) (€) 0.29 0.38 0.30 0.36 0.38 0.46 0.51 0.58

DPS (net) (€) 0.09 0.13 0.15 0.18 0.19 0.22 0.25 0.28

Net (debt) / cash 3,608 4,397 3,010 3,104 3,945 4,953 6,106 7,430

Profitability/valuation 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E