Nokia (NOK) might be something of an afterthought in the buzz machine that is the U.S. smartphone market, but size counts for something, says Charter Equity Research. Analyst Ed Snyder today upgraded the world’s dominant maker of mobile handsets to Buy from Market Perform.
Some hightlights from Snyder’s upgrade:
- Nokia might not be the fastest mover, but supply chain efficiencies have kept costs low and protected double-digit operating margins throughout the downturn. “…while [Nokia] loses the innovation battle it usually wins the handset war by eventually replicating the innovators�� features into lower cost phones across a much wider channel,” Snyder writes.
- Cost competition among carriers will ultimately lead to fewer subsidies and cheaper phones, which favors Nokia because it can maintain margins at lower price points.
- Nokia’s slow response to the iPhone, has investors writing off Nokia stock.? “That sentiment combined with analyst��s excessive U.S. centric view of the mobile phone market has left many investors exposed to rapid appreciation in the stock when sell-side opinions normalize with a rebound in earnings,” he says.
Shares of Nokia are up 1.1%, or 16 cents, to $15.24 today.
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