Oppenheimer Sees Eventual Upside For Nokia

The market has been down on former mobile heavyweight Nokia Corporation NOK for quite some time. The heyday of Nokia's reign as a mobile leader has been surpassed, but a recent analyst note from Oppenheimer remains optimistic about the company's future.

Oppenheimer still sees upside in Nokia for the long term and believes a new capital allocation strategy will improve investor sentiment. The company has a reported €1.5 billion in buybacks and another €1.5 billion in special/regular dividends. Nokia offers a strong 5.01 percent dividend yield.

"We continue to see long-term positives as management's execution strength optimizes restructuring efforts and potential cross product segment
Development synergies," said Oppenheimer.

Nokia's acquisition of Alcatel-Lucent in early 2016 is expected to lower operating costs by $1.1 billion annually by 2019. Oppenheimer believes we may see more promising news when Nokia hosts its first Capital Markets Day post the ALU merger on November 15.

"We see Nokia's Capital Markets Day as a point where longer term opportunities become clearer, potentially resetting sentiment more positively. We also believe that over time
Nokia will drive stronger growth from its IP portfolio."

Oppenheimer maintains an Outperform rating with an $8 price target.