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Why Nokia Stock Jumped 17% on Monday Morning

By Anders Bylund - Jan 25, 2021 at 1:12PM

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The Finnish telecom equipment expert got a rosy report from a Swedish analyst.

What happened

Shares of Nokia (NOK 0.69%) jumped as much as 17% higher on Monday morning, following a bullish report from a Swedish analyst firm.

So what

The Finnish maker of telecom-grade networking equipment received a rosy report from SEB, one of the largest financial institutions in Scandinavia. SEB raised its target price on Nokia from $4.25 to $4.60 per share and reiterated its buy rating on the stock. The report turned into a self-fulfilling prophecy, as Nokia's stock now trades above the target price that sounded so bullish before the opening bell. The financial group argued that Nokia's stock is undervalued in comparison to Swedish rival LM Ericsson, whose stock trades at far higher price-to-sales and price-to-free-cash-flow ratios.

A rocket takes off from a tablet computer's screen.

Image source: Getty Images.

Now what

SEB expects low drama in Nokia's fourth-quarter earnings report, which is due Feb. 4. The firm also expects Nokia to reinstate its dividend policy, which has been paused since the summer of 2019. It's no surprise to see Nokia's shares surging in response to this bullish analysis. This company is a global leader in the market for 5G wireless carrier equipment, which will remain an explosive opportunity for the next few years.

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Stocks Mentioned

Nokia Corporation Stock Quote
Nokia Corporation
NOK
$5.12 (0.69%) $0.04
Telefonaktiebolaget LM Ericsson (publ) Stock Quote
Telefonaktiebolaget LM Ericsson (publ)
ERIC
$8.21 (2.05%) $0.17

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