Nokia: Latest Model

I have recently scaled back my estimates for revenue and margins, as well as adjusted the WACC calculation and flattened working capital estimates. I also incorporated the NSN acquisition and increased margins for this business segment.

Considering I have spent the last 7 months working on and updating this model, I am highly convinced that this version is accurate and as complete as can be at this point.

The conclusion of the model is a price target of $4.95. Using sensitivity analysis for LT Growth Rate and the WACC has given me a 1 year out price target range of $4.70 – $9.05; averaging this range gives a 1 year out price target of $6.88.

While I took some profits in the $4.20 range a couple of weeks ago, I added more earlier this week and will continue to buy more stock and options if Nokia dips below $4.

The next leg up to $5 may occur anytime between now and early October, which is when Nokia will release information and adjustments to their guidance. Short covering has commenced and will likely continue over the next month plus.


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