Nokia's Buy Calls Land, but the Cash Conversion Cut Is the Real Test
Published on 10/25/2026 at 13:40 | Editorial boerse-global.de
Nokia shares drew fresh support on Friday, rising 2.8% as analysts pushed back against what several described as an overdone sell-off following the company's quarterly report. The endorsement came with a wrinkle, however: not every bullish note carried an unchanged price target.
Handelsbanken upgraded the stock from "Hold" to "Buy" on Friday while keeping its EUR 10 target in place, a move media reports tied to the double-digit share price decline that followed the earnings release. Rosenblatt took a different route, trimming its target to $14 from $15 while maintaining its buy rating. The firm pointed to lower valuation multiples among comparable companies as the reason for the cut, even as it called the quarterly figures solid and the subsequent sell-off excessive.
The numbers behind the debate landed on Thursday. Nokia reported comparable operating profit of EUR 605 million for the third quarter of 2026, a 35% year-on-year increase. On a reported basis, operating profit moved the other way, falling 22% to EUR 196 million. Worries about higher restructuring charges and the company's cash flow guidance weighed on the stock despite results that beat Wall Street expectations, according to media reports.
Revenue for the quarter reached EUR 5,154 million, up 10% on a reported basis. The comparable net sales figure came in at EUR 5.15 billion, matching that same 10% growth over the prior-year level.
Should investors sell immediately? Or is it worth buying Nokia?
What gave the sell-off its teeth was the guidance detail. Nokia reaffirmed its full-year 2026 outlook for comparable operating profit of EUR 2.1 billion to EUR 2.6 billion, but lowered its assumption for free cash flow conversion to 35%–55%. Investors will get the next full set of figures on January 28, 2027, when Nokia reports fourth-quarter and full-year 2026 results.
Alongside the earnings news, Nokia's board confirmed a dividend of EUR 0.03 per share on Thursday. The payout sets a fixed cash return per share, but it answers a different question than the analyst calls do — those concern valuation after the pullback, not the durability of the operating improvement.
That durability hinges on whether strong demand from AI and cloud customers turns into further profitable business. Nokia booked 123% year-on-year revenue growth in that customer group during the third quarter of 2026, while order intake jumped 118% to EUR 1.5 billion. Orders and revenue are not the same thing, though, and the investment case rests on whether Nokia converts that backlog into business that also lifts the bottom line. The growth rates offer a starting point, not a guarantee.
Nokia at a turning point? This analysis reveals what investors need to know now.
There is a caution buried in the bullish notes. A sell-off judged excessive does not make a stock cheap, and analysts can consider a decline overdone while simultaneously applying more conservative valuation yardsticks. Rosenblatt's cut captures exactly that tension: the immediate market reaction looked overdone to the firm, yet the valuation environment justified a lower target. Even with the business expanding, a more cautious multiple could cap the stock's headroom — and the dividend decision does nothing to change that.
For now, the positive case holds together as long as Nokia keeps translating elevated demand into both revenue and profit. Demand, sales and earnings would need to confirm one another, with the unchanged annual outlook serving as the existing frame of expectations. A guidance raise is not a prerequisite; reliable delivery on the current targets would be enough to matter. If execution loses credibility instead, cheaper analyst ratings may prove too thin a prop. Anyone buying the dip is betting on further operating progress, while anyone waiting is asking for more evidence of the same — and that gap has little to do with the EUR 0.03 payout.
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