Ålandsbanken has lowered its view on telecom equipment maker Nokia to neutral, assessing the stock as fully valued at current levels. The bank noted in its morning briefing that the downgrade follows a sharp rally, with the share price climbing approximately 54 percent this year and 93 percent over the past twelve months.
The re-rating has been driven by expectations surrounding data center expansion, which benefits the Network Infrastructure division. However, the bank warns that more subdued growth - for instance, around five percent annually after 2028 - would leave the stock clearly overvalued, particularly given the intense competition and high capital expenditure requirements.
Nokia Oyj specializes in the design, production and marketing of telecommunications equipment. Net sales break down by activity as follows:
- development of network infrastructure solutions (40.1%): IP routers and optical networking solutions;
- development of mobile broadband network solutions (39.2%): aimed in particular at telecommunications operators. In addition, the group offers professional services (network planning and optimization, systems integration, installation, implementation and maintenance of telecom networks);
- software development (13.1%): software for customer experience management, network operations and management, communication, collaboration and billing, IoT solutions and cloud management platforms;
- development of advanced technology (7.6%).
Net sales are distributed geographically as follows: Europe (31%), North America (31.2%), India (7.7%), China (4.6%), Asia/Pacific (11%), Middle East and Africa (10.6%), and Latin America (3.9%).
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