Price Target Increase#
BofA Securities has raised its price target for Nokia (NYSE:NOK) from $12.40 to $12.70 while maintaining a Buy rating. Currently, Nokia's stock is trading at $10.23, which is close to its 52-week high of $10.69. Over the past year, the stock has surged by 90%.
Growth in Optical & IP Networks#
Nokia has increased its growth forecast for its Optical & IP Networks division for fiscal 2026, now expecting an organic growth rate of 18-20%, up from the previous estimate of 10-12%. This growth is largely driven by anticipated increases in revenue from data center switches, particularly in the U.S. market, where Nokia is gaining traction among large data center operators, known as hyperscalers.
Adjustments to Revenue Estimates#
BofA Securities has also adjusted its revenue estimates for Nokia for fiscal years 2027-2028, increasing them by 2-4%. However, they have also raised their estimates for operating expenses. As a result, adjustments to the company's Earnings Before Interest and Taxes (EBIT) estimates for fiscal years 2026, 2027, and 2028 are -0.6%, -0.2%, and +3.2%, respectively.
Recent Earnings Report#
In its first-quarter earnings report for 2026, Nokia exceeded expectations with an earnings per share (EPS) of $0.0586, surpassing the forecast of $0.0446 by 31.39%. However, the company reported a slight revenue shortfall, generating $5.27 billion compared to the anticipated $5.32 billion. Despite this, investor confidence remains strong, bolstered by Nokia securing €1 billion in AI orders during the quarter, adding to the €2.4 billion in AI orders from 2025. Following these developments, Raymond James has also raised its price target for Nokia to $12.00 from $7.00, maintaining an Outperform rating.