Nokia: Buy, Says Morgan Stanley; N8's A Hit!

Countering a hefty degree of skepticism on the Street about Nokia, Morgan Stanley’s Patrick Standaert this afternoon writes that the company’s N8 smartphone–which has been labeled a dud by some, and had trouble turning on–is a hit.

He advises buying the stock in advance of “catalysts” coming in the first half of next year, especially given a share price that represents just 9 times estimated 2011 earnings per share, backing out the company’s cash.

A Morgan Stanley survey of 150 handset retailers in five countries in Europe shows N8 sell-through of one for every six Apple iPhones that are sold, notes Standaert.

That may not sound so hot, but expectations are so low that sales of 2.5 million N8s in the current quarter, and 9 million in 2011, would be better than the Street is expecting, writes Standaert. And it would be enough to keep the company’s market share at about 35 percent.

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