Nokia's Profit Engine Is Humming Again — the Cash Register Is Still Catching Up
Published on 10/24/2026 at 12:41 | Editorial boerse-global.de
Two broker notes landed on Nokia this week, and between them they tell a more interesting story than either does alone. Handelsbanken and OP Corporate Bank both moved the Finnish telecom equipment maker to Buy, each with a EUR 10 target, according to media reports. Rosenblatt Securities went a different route: it trimmed its price target from $15 to $14 while keeping its Buy rating, citing lower valuation multiples across comparable companies. All three houses described the post-earnings selloff as overdone — a view that helped lift the shares 2.8% yesterday.
Yet the split between a lower target and an unchanged recommendation captures precisely what investors are wrestling with. A softer valuation doesn't have to mean a dimmer view of the business, and in this case it didn't.
Strong numbers, with an asterisk
Nokia's third-quarter 2026 report, released Thursday, put revenue at EUR 5,154 million. On a constant-currency basis sales grew 9%; reported growth came in at 10%. Comparable operating profit jumped 35% to EUR 605 million, and the comparable operating margin reached 11.7%.
The company also left its full-year 2026 comparable operating profit guidance untouched at EUR 2.1 billion to EUR 2.6 billion — a signal that management hasn't scaled back its operating plan despite the added strain elsewhere.
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What did change was the guidance on turning that profit into cash. Nokia cut its free cash flow conversion assumption to 35%–55%, pointing to working capital investments and an accelerated restructuring program. Planned working capital spending, meanwhile, rose by EUR 400 million. The restructuring isn't a footnote to the outlook; it is part of the financial explanation for it.
Two questions, one company
Here is the tension in its simplest form: a higher operating profit and a weaker conversion of that profit into free cash flow can happen at the same time. The income statement alone won't tell you how much financial room actually opens up. Growth can be economically attractive and still absorb money in the near term.
That distinction is what makes the upgrade wave only a partial answer to the earlier slump. The bulls are emphasizing operating momentum; the skeptics are focused on how slowly that momentum reaches the bank account. Both are reading the same figures.
The next leg is still a promise
Beyond the current quarter, Nokia has laid out plans for its network divisions. On Thursday it projected combined growth of 25%–30% for Optical and IP Networks in 2027. That is an expectation, not a delivered result — but it explains why the capital-binding debate extends well past a single quarter. Investors have to weigh not only whether the growth path is credible, but how Nokia funds it.
Wednesday's announcement that Nokia is widening its collaboration with NVIDIA on AI-powered radio networks and a sovereign platform for AI agents in network operations fits the same pattern. Pilot projects announced with BT, Deutsche Telekom and Elisa involve Nokia software running on NVIDIA technology. They supply a technological narrative, not evidence of additional profits already booked.
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What to watch
The next scheduled checkpoint is the full-year 2026 results on January 28, 2027. That report will show whether Nokia has met its confirmed profit guidance and how free cash flow has actually developed.
Until then, the yardstick isn't a single recovery session or the lowered cash conversion assumption on its own. It's the link between the two: Nokia has to bring operating progress and cash generation together. The upgrades give the company credit for the first half of that equation. They don't relieve it of the second.
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