Stocks

Nokia (NOK) surges on 5G demand and analyst upgrade

Nokia (NOK) stock trades sharply higher Friday after Goldman Sachs analyst Alexander Duval turned bullish on the telecom-infrastructure provider, lifting his rating to Buy from Neutral, and setting a new price target of $6.50, up from $4.90.

Duval writes that the more bullish view reflects a combination of an improving outlook for 5G network infrastructure spending, progress on wireless product development, and an ADR price that has badly lagged peers. He notes that Nokia over the last three years has lagged rival Ericsson (ERIC) by 75 percentage points, due to a combination of “lagging wireless-equipment product quality, [market] share losses, and negative EPS revisions.”

But the analyst adds that he sees upside from here.

For one thing, he says that 5G spending at European telcos like Vodafone and BT is poised to improve. He notes that “spectrum auctions have been progressing,” and that commentary from Ericsson suggests “an inflection in demand.”