Nokia's Stock Bounce Masks a Harder Question: Where the Cash Went
Published on 10/23/2026 at 21:31 | Editorial boerse-global.de
Nokia shares climbed 2.0% today, with media reports attributing the gain to buy recommendations issued after the previous session's selloff. The rebound is the easy story. The harder one sits in the fine print of yesterday's quarterly report, where Europe's two most closely watched Nokia analysts reached strikingly different conclusions from the same set of numbers.
Handelsbanken upgraded the stock from "Hold" to "Buy" and reaffirmed its EUR 10 target, arguing that the market overreacted to the results. Inderes moved in the same direction but stopped well short of enthusiasm: the Finnish house lifted its rating from "Sell" to "Reduce" and raised its target from EUR 6.50 to EUR 7. Both firms acknowledge the improved operating performance. Only one of them thinks it justifies buying the shares.
A beat that came with an asterisk
The quarter's comparable operating profit landed at EUR 605 million, comfortably ahead of Inderes' own EUR 435 million estimate. The analysts flagged one-off items that weighed on reported earnings, and noted that free cash flow stayed negative as working capital swelled. That distinction matters: a strong adjusted profit line tells you little about how much money the business actually generated.
Inderes raised its earnings forecasts for the coming years by 6–7% but paired that with a rating still below neutral. The message is that a better profit outlook and an attractive valuation are not the same thing. For 2027, Nokia itself guides comparable operating profit to a range of EUR 2.7 billion to EUR 3.2 billion, while holding its 2026 forecast at EUR 2.1 billion to EUR 2.6 billion.
What the company did trim yesterday was its assumption for converting earnings into free cash flow, now set at 35%–55%. That single revision is arguably the most consequential line in the entire report.
Should investors sell immediately? Or is it worth buying Nokia?
Two growth stories, one common thread
Separately, Nokia, ICEYE and Ukraine's defence ministry signed a letter of intent to explore cooperation on sovereign satellite communications. The agreement, inked yesterday, targets satellite connectivity for Ukraine's defence capabilities. It is a concrete step between named partners — but not a signed supply contract. No revenue, no earnings, just a business avenue that would first have to become an actual collaboration.
That distinction separates it from the numbers Nokia also disclosed yesterday: revenue from AI and cloud customers jumped 123% year on year, and the company booked new orders worth EUR 1.5 billion. Those figures describe business already reported. They should not be lumped in with the satellite project, which remains an intention rather than an order.
Still, the sovereignty theme links the Ukrainian initiative to Wednesday's announcement with NVIDIA, which unveiled new capabilities for AI-driven radio access networks and a sovereign platform for AI agents managing network autonomy. Nokia also reported progress in operator trials and deployments. Satellite links for Ukraine and self-governing telecom networks are different undertakings, yet both circle the same question — not just who builds the networks, but who controls them.
The bar the bulls have to clear
Handelsbanken's optimism rests on hard projections: adjusted earnings per share are expected to grow 21% next year and another 11% the year after. Inderes, by contrast, attaches a demanding profit assumption to a recommendation that investors reduce their exposure — a combination worth more weight than the headline target increase alone.
For the combined Optical and IP Networks units, Nokia expects 25%–30% revenue growth in 2027. Management gave no separate growth rates for the two businesses and no precise measurement basis, so the forecast describes strong joint expansion without allowing a clean split between the segments. The integration of Infinera stands as the concrete test of whether that expansion reaches the bottom line.
Investors get their next formal checkpoint on 28 January 2027, when Nokia reports fourth-quarter and full-year 2026 results. Until then, the line should stay clear: sovereignty describes a strategic direction, and the satellite memorandum opens a commercial prospect. Neither proves revenue or profit on its own. Orders, margins and cash flows will have to do that.
Ad
Nokia Stock: New Analysis - 23 October
Fresh Nokia information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
