Nokia (NYSE: NOK) stock price lost substantial value in fiscal 2019 amid a steady decline in financial numbers. The lower than expected results for the third quarter and downside guidance for the full year added to bearish sentiments. NOK share price plunged close to 34% in the past twelve months; the shares are currently trading close to the lowest level in the last eight years.
The market analysts are suggesting investors capitalize on the buying opportunity. They see the Nokia stock price selloff a buying opportunity for value investors. The company’s investment in growth opportunities such as 5G and IoT is likely to enhance investor’s sentiments in fiscal 2020.
Analysts Raised Nokia Stock Target
Raymond James upgraded the NOK share price target to Strong Buy with a price target of $5. Nokia shares are currently trading below $4. The firm claims that poor financial results for the third quarter already priced into the stock. The firm also anticipates NOK share price to bounce back in the coming days amid its potential to regain its footing.
On the other hand, New Street increased its ratings from Neutral to Buy following a big selloff in the last few months.
Its true Nokia’s strategy of pausing its quarterly dividend had negatively impacted the share price performance. However, the strategy of reducing cash outflow would enhance its investment potential.
Dim Outlook Could Limit the Upside Potential
The company has reduced its outlook for fiscal 2019 and 2020. Non-IFRS FY19 EPS is expected at €0.21, down from earlier guidance of €0.25 – €0.29. Nokia also declined the fiscal 2020 earnings outlook to €0.25 compared to the prior guidance of €0.37 – €0.42. The company blames investment in new growth opportunities for downside guidance.
Its CEO said, “I am confident that our strategy remains the right one. We continue to focus on leadership in high-performance end-to-end networks with Communication Service Providers; strong growth in the enterprise; strengthening our software business; diversification of licensing into IoT and consumer electronics.”