Nokia shares bounce as Merrill, WestLB upgrade
HELSINKI (Reuters) - Shares in the world's top cellphone maker Nokia Oyj (NOK1V.HE) rose on Monday, bouncing after Friday's gloomy outlook statement and helped by recommendation upgrades from Merrill Lynch and WestLB.
Shares in Nokia were 4.5 percent higher at 10.40 euros by 0906 GMT, outperforming a 2.4 percent firmer DJ Stoxx technology index .SX8P.
Merrill raised its recommendation for Nokia shares to "buy" from "neutral," while WestLB upgraded its stance on the shares to "hold" from "sell," as a raft of brokerages adjusted estimates following Friday's warning.
"Looking six months out, we see the company re-accelerating its handset release process after significant problems in 2008," Merrill Lynch analysts said in a research note.
"This, and valuation, underpins our call, rather than an impossible-to-prove trough in newsflow which will remain grim near term."
Nokia on Friday cut its market growth forecast for the holiday sales-fueled fourth quarter and said handset market volumes and the overall telecommunications equipment market was expected to fall next year as the economy slows.
Its shares initially shed more than 7 percent to levels last seen in August 2004, before trimming losses and closing down 3.7 percent.
"In essence, Nokia's 2009 outlook only confirms that the handset market is in bad shape. This is not new. But we still do not know the degree of volume, value and margin contraction it could bring," WestLB analyst Thomas Langer said in a note. (Reporting by Tarmo Virki; Editing by David Holmes)
