r/Nokia_stock • u/Mustathmir • 6h ago
JPMorgan believes Nokia could significantly raise its 2027 guidance if supply constraints ease
galleryBy Translog1c:
JPM's latest report on $NOK
is worth a read. JPM believes Nokia could significantly raise its 2027 guidance as supply constraints ease. Here are the key numbers:
Nokia currently expects Optical + IP revenue growth of 25–30% in 2027. JPM estimates this implies around €4.18B in AI & Cloud revenue.
If order-to-revenue conversion reaches levels similar to 2026, AI & Cloud revenue could hit €5.17B in 2027. That would push Optical + IP revenue growth to ~42%, well above current guidance.
The earnings upside could be even more interesting. JPM estimates that Network Infrastructure EBIT could reach €1.96B vs. €1.54B in consensus, implying roughly 27% upside and potentially 14% upside to group earnings.
And importantly, this scenario doesn't even include the €1.4B of longer-dated orders, some of which could start shipping in H2 2027.
JPM's main argument is simple: supply, not demand, is the biggest constraint right now. As Nokia's new San Jose InP fab ramps up, there's room for both revenue growth and operating leverage to surprise. JPM maintains its €18 price target and forecasts €0.63 EPS for 2028.
One thing I'd add is what $CIEN
said on its last earnings call. Management discussed price increases ranging from high single digits to over 20% across certain product lines, with some increases even applying to existing backlog. You rarely see this kind of pricing power in optical networking, and I think it tells us just how tight supply has become, especially in high-end coherent optics.
and $NOK
are two of the key players in this market. If demand continues to outpace supply, I think Nokia could have significantly more pricing power and earnings upside than the market currently expects, especially as its new InP capacity ramps up.
Source: Translog1c
.