Shares of Finnish technology and network solutions major Nokia (NYSE:NOK) are trending nearly 2% higher today after the company provided an update on its group strategy and financial expectations.
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Back in 2021, Nokia restructured its operating model from a matrix organization to four distinct business groups: Network Infrastructure, Mobile Networks, Cloud and Network Services, and Nokia Technologies. Since then, these business units have bolstered their product offerings and market leadership. Now, these business groups will have increased strategic autonomy to support growth and portfolio management.
Further, the company’s corporate core will function as an overarching “strategic architect” guiding these businesses. Additionally, Nokia will begin reporting cash flow and regional sales at the business group level next year.
However, as part of its long-term planning, Nokia has lowered operating margin expectations (to be reached by 2026) to at least 13% from the previous outlook of at least 14%. Still, the company expects revenue to “grow faster than the market” during this timeframe.
Is NOK a Good Stock to Buy Now?
Earlier this month, Nokia lost a major wireless contract from AT&T (NYSE:T), worth nearly $14 billion, to Ericsson (NASDAQ:ERIC). As a result, shares of the company have slumped closer to lows last seen in October 2020. However, the Street still has a Strong Buy consensus rating on Nokia. Indeed, the average NOK price target of $4.83 per share implies a 54.8% potential upside in the stock.
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