Nokia Wins Two Upgrades but Only One Buy Rating as Cash Flow Tests the Bull Case
Published on 10/23/2026 at 19:21 | Editorial boerse-global.de
Nokia shares drew two fresh analyst actions on Wednesday, and they point in opposite directions. Handelsbanken and OP Corporate Bank both lifted their ratings to Buy with a EUR 10 target, sending the stock up 3.0%. Inderes moved the other way — not down, but not aboard either: it raised its recommendation from Sell to Reduce and its target from EUR 6.50 to EUR 7.
The split is instructive. All three houses accept that Nokia's earnings momentum has improved. They disagree on whether that improvement is enough to own the stock.
What the quarter actually delivered
Nokia reported third-quarter 2026 results a day earlier: currency-adjusted sales up 9%, and comparable operating profit up 35% — a far steeper climb than revenue. Comparable operating profit came in at EUR 605 million, with a comparable operating margin of 11.7%. Management left its full-year guidance untouched.
That print cleared Inderes' own estimate of EUR 435 million by a wide margin. The Finnish broker nonetheless flagged one-off items that weighed on the reported figure, and pointed to a free cash flow still in negative territory as working capital swelled. Adjusted profit alone, in its view, doesn't tell the whole story.
Should investors sell immediately? Or is it worth buying Nokia?
The company's confirmed 2026 guidance for comparable operating profit stands at EUR 2.1 billion to EUR 2.6 billion — the yardstick against which the year will be judged.
The cash question neither camp can ignore
Free cash flow was negative EUR 99 million in the third quarter. Nokia attributed the shortfall to working capital investments and an accelerated restructuring program, and it trimmed its assumption for how efficiently earnings convert into cash. The explanation is mechanical rather than mysterious, but it still leaves a real outflow sitting next to an operating improvement.
That tension is the heart of the debate. Handelsbanken reads the market's reaction to the report as overdone and sees an entry point; it expects adjusted earnings per share to grow 21% next year and another 11% the year after. Inderes, even after lifting its earnings forecasts by 6–7% for the coming years, keeps a cautious stance — a demanding profit assumption and a Reduce rating can coexist.
Growth targets set the bar
Nokia's own ambitions are lofty. For the year after next it targets comparable operating profit of EUR 2.7 billion to EUR 3.2 billion. Optical Networks and IP Networks combined are expected to grow revenue 25–30% next year, though the company gave neither separate growth rates for the two businesses nor a precise measurement basis — a strong joint expansion, but one that can't be pinned to individual units.
Integration of Infinera is the other concrete checkpoint. How smoothly that deal comes together will be a live test of whether the profit trajectory holds.
For investors, the takeaway is less about the 3% move than about the gap between earnings and cash. The upgrades are a vote of confidence, and the operating growth gives that vote some substance. Whether it gets cashed in depends on Nokia closing the distance between the profit it reports and the money that actually stays behind.
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