Nokia's Rebound Has Two Engines — Only One of Them Is Firing
Published on 10/24/2026 at 23:10 | Editorial boerse-global.de
Nokia shares climbed 2.8% yesterday, and the credit went to the analysts. Handelsbanken moved the stock from Hold to Buy, and Rosenblatt called the prior sell-off overdone, keeping its Buy rating in place. That combination — an upgrade plus a defense of the stock — helped the market reconsider how heavily it had been weighing Nokia's third-quarter news.
The reconsideration is not the same thing as an all-clear. The worries that drove the sell-off — thinner free cash flow and heavier restructuring charges — are still on the table. What changed yesterday was the price the market is putting on them, not the facts underneath.
A Buy Call That Comes With a Lower Target
The analyst signals were not uniformly bullish, and that nuance matters. Handelsbanken held its €10 price target steady while upgrading the shares. Rosenblatt, for its part, trimmed its target to $14 from $15, citing lower valuation multiples among comparable companies — even as it stuck with its Buy recommendation.
That pairing tells investors something useful: a Buy rating can travel alongside more cautious valuation assumptions. Yesterday's advance reads best as a correction of a reaction that had been judged excessive. It is not a blanket reassurance.
The Quarter That Started the Argument
The numbers Nokia released on Thursday explain why the debate has weight. Third-quarter 2026 revenue came in at EUR 5,154 million, and comparable operating profit grew 35%. Set against that, the company lowered its expected conversion of earnings into free cash flow.
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So operating progress and a softer cash outlook sit side by side. That is not a contradiction a friendly share-price move can dissolve. It argues instead for judging profit growth and actually available funds as separate questions.
Nokia kept its full-year comparable operating profit guidance at EUR 2.1–2.6 billion. At the same time, it raised planned restructuring expenses to EUR 1,100 million. The unchanged profit forecast does not cancel out the more cautious cash flow assumption, which now stands at 35%–55% conversion. Nor do the higher restructuring charges disappear because the stock bounced.
SoftBank Test Is a Date, Not a Revenue Line
Beyond the quarterly back-and-forth, the planned SoftBank collaboration offers a concrete anchor in time. On Tuesday the two companies agreed to a commercial AI-RAN field trial in Japan for 2027. Nokia's anyRAN software is to run on SoftBank's AITRAS platform, using computing infrastructure from NVIDIA.
It is a specific commitment with a named partner and a timeframe — and it is not a completed deployment. That distinction is central to how the stock should be read. An agreed field trial makes the commercial outlook more tangible, but on its own it proves neither broad adoption nor profitability. It is meaningful progress, not a business success booked in advance.
The same reading applies to Wednesday's announcement that Nokia is widening its work with NVIDIA, covering AI-driven radio functions and a sovereign platform for autonomous operations in telecom networks. Nokia also reported advances with several network operators. Taken together with the SoftBank project, a clearer picture of the intended applications is emerging — but a picture is not a contract.
The Portfolio Move Needs a Financial Payoff
A second test sits in the October 13 agreement to sell the Enterprise Campus Edge business to AURELIUS. Closing is expected in the first half of 2027, subject to customary conditions and regulatory approvals. Nokia has thus agreed a portfolio step, not reported a completed sale.
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That transaction belongs to the same valuation question as the AI projects: will the strategic repositioning also deliver financially? A reshaped portfolio is first of all a management decision. Whether it produces a stronger economic footing has yet to be demonstrated.
What Would Actually Justify a Re-rating
For investors, the yardstick shifts. Not every new partnership deserves to be treated as an automatic addition to the valuation. What carries more weight is whether announced steps turn into commercial use — and the agreed field trial gives a point against which that progress can later be measured.
The restructuring deserves at least as much attention as the growth projects. A better comparable result does not by itself remove the burden of the overhaul or the lower expected cash conversion.
Nokia has lined up concrete steps to test its AI technology commercially and is reworking its portfolio. That argues against a blanket negative reading. A durable re-rating, though, has to be earned through execution and financial delivery — not through analyst tailwinds alone.
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