Nokia: Look Out Below
Thought Nokia’s 52-week low yesterday was bad? Better brace yourself for today’s.
Shares in the company were down 6.9 percent Wednesday morning after falling 18 percent Tuesday on news of the handset maker’s profit warning. And they’re almost certain to tumble further given the number of analyst downgrades they’re being slapped with today. What was once a hypothetical worse case scenario is becoming increasingly more real, as Bernstein analyst Pierre Ferragu observed in a particularly brutal research note this morning.
“In a fast changing market, Nokia is losing ground very rapidly,” he wrote. “The profit warning for the second quarter provided evidence that the next couple of years will prove very challenging, with the gross margin and market share trends of the last 4 quarters continuing, if not accelerating even more. The collaboration with Microsoft now appears to us unlikely to be successful, as Nokia’s brand is losing ground too fast and the window of opportunity for an alternative ecosystem is vanishing rapidly.”
Nokia CEO Stephen Elop appears at D9 later this week.