Nok stock: Nokia Is Now Free Cash Flow Positive, Making NOK Stock Worth Much More

Feb. 7, 2021

Here is the article. 

Nokia (NYSE:NOK) released its Q4 and full-year 2020 results on Feb. 4. The bottom line is that NOK stock is now worth at least 39% more, and as much as 68% more, based on its positive free cash flow (FCF).

This is now the sixth quarter that Nokia has been FCF positive. The company cut out its dividend last year until it could produce solid FCF and raise up its net cash.

Now Nokia management is saying they will assess their dividend policy. They will provide an update during its Capital Markets Day on March 18, 2021.

What to Do With NOK Stock

This brings the estimate for Nokia stock, using $2.592 billion at a 6% FCF yield to $43.2 billion, which is 68% above today’s price. After all, the company presently has a 6.3% FCF yield (i.e., 1.356 billion EUR, or $1.627 billion in FCF divided by its present market cap of $25.66 billion).

This implies a target price of $7.36, or 68% above its price today of $4.38. As a result, we have come up with a target price range of $6.08, 39% higher, to $7.36, 68% above today’s price.

In either case, this is a good result for most investors.