Analyst Note| Mark Cash |
We are raising our fair value estimate of no-moat Nokia to EUR 5.00 from EUR 4.90 (maintaining U.S. ADR at $5.70) after the company released preliminary 2021 results, and we view shares as fairly valued. Nokia's estimated revenue of EUR 22.2 billion for 2021 (2% year-over-year growth) matched our expectations, while an updated comparable operating margin range of 12.4%-12.6% for 2021 surpassed our anticipation (previous guidance was 10%-12% comparable operating margin). The upside in comparable operating margin is aided by venture fund investments, a one-off software contract in the year, bad debt provision reversals, and other one-time benefits. Nokia estimates these one-offs contributed about 150 basis points of the comparable operating margin for 2021.