Nokia (NYSE:NOK) Gets Goldman (GS) Love, Jumps 4 Percent

Saying pessimism over Nokia (NYSE:NOK) may have bottomed out, Goldman Sachs (NYSE:GS) analyst Tim Boddy gave the company a rating boost, resulting in shares of the company jumping over 4 percent. He sees it as an attractive entry point for the company.

Boddy said he considers the stock priced as if it were a struggling auto company, which in his opinion is an excessive response.

While he believes the global share of mobile phones by Nokia will be cut by about 50 percent, he believes the company will rebound once the hit bottom sometime in the middle of 2012.

The catalyst will be the partnership they have with Microsoft (NASDAQ:MSFT) in Boddy's view, which Nokia will benefit from their business connections. He also sees them benefiting from "cloud services."

Saying the stock is priced at 6.4 times enterprise value as a multiple of Ebitda, and 0.4 times sales, based on 2011’s estimates — multiples that assume the company will see its share of the total “value” of smartphones cut in half, to 10%, and assumptions are there will only a 3% Ebit margin on handsets.

That’s excessive, according to Boddy. More than likely, Nokia can maintain “mid-teens” share of cellphone value, on a percentage basis, and a “high single digit” overall handset Ebit.

Nokia was trading at $8.68, gaining $0.32, or 3.89 percent, as of 12:20 PM EDT. They've dropped off from a high of $8.80 earlier in the session.




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