Merrill Lynch upgraded Nokia (NOK) to buy.
Analyst Adnaan Ahmad says his upgrade is based on increased handset shipment estimates driven by a revamped model, and higher market share than he previously forecasted. Ahmad is now forecasting 474 million handset shipments in 2003 vs. a consensus of 435 million; for 2004, he sees 501 million units.
Ahmad thinks the significant growth of subcribers in 1999 and 2000 is likely to lead to a replacment boom, as it is unlikely that consumers will hold onto handsets for more than three or four years. He thinks Europe will be a major replacement market in 2003; Nokia commands a disproportionately higher market share in Europe, which expects to continue growing.
Ahmad upped his 73 euro cent 2003 earnings per share estimate to 1.02 euros, and upped the 73 euro cent 2004 estimate to 1.06 euros.