Friday, April 1, 2011

Nokia (NOK) Price Target Slashed on Supply Fears

Nokia (NYSE:NOK) had its price target cut by RBC Capital’s Mark Sue Friday, citing concerns over possible supply issues.

Sue also lowered his price target on Motorola Mobility (NYSE:MMI) earlier in the trading day for similar reasons.

He wrote in a note, “Things may get better, but it will also take the supply chain quite some time to recover.”

The problems surrounding the overall industry, and Nokia in particular, concern the second quarter, where supply disruptions would impact the bottom line.

In the first quarter, Sue sees Nokia beating his estimates of 106 million units sold, while in the second quarter supply problems could cause units sold to drop from 109 estimates units delivered to 102 million units delivered.

As for the fear over the transitional period to Windows Phone 7 (NASDAQ:MSFT) having a negative impact on Nokia's sales of Symbian devices, he said that “Despite all of the concerns that consumers will leave the Symbian OS in droves, it just isn’t happening."

“The vast majority of consumers generally don’t seem overly focused on the device’s operating system, which explains the near-term healthy unit dynamics.”

Nokia was trading at $8.49, down $0.02, or 0.24 percent, as of 12:33 PM EDT. Sue lowered his price target on the company from $14 to $12.

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