Nokia (HLSE:NOKIA): Evaluating Valuation After Landmark E.ON Deal for Germany’s Energy Grid Modernization

Nokia Oyj (HLSE:NOKIA) has secured a five-year strategic contract with E.ON SE to modernize telecommunications for Germany's energy distribution system operators. This move promises lower energy consumption, stronger grid security, and future-ready quantum-safe networks.

See our latest analysis for Nokia Oyj.

Nokia's recent momentum isn't just about the E.ON deal. Shares have soared, logging a staggering 66.4% share price return over the past month and an 83.5% gain in the past 90 days. Recent news ranging from a high-profile private placement involving NVIDIA to next-gen video coding partnerships and multiple network buildouts have fueled this optimism, signaling investors are betting on Nokia's long-term transformation. While long-term total shareholder return of 156.7% over five years stands out, the brisk pace of gains this year suggests momentum is clearly building.

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With shares surging and headline deals stacking up, the real question is whether Nokia’s rally leaves room for further upside, or if expectations for future growth are already fully reflected in the current valuation.

Most Popular Narrative: 45.5% Overvalued

With Nokia’s share price closing well above the most widely referenced narrative’s fair value estimate, the market’s optimism far outpaces consensus projections and assumptions behind the current fair value.

Scalable operational improvements, ongoing cost discipline, and rapid integration of recent acquisitions (e.g., Infinera) are positioned to enhance operating leverage and expand net margins over time as revenue mix shifts toward higher-margin portfolios.

Read the complete narrative.

What’s the secret sauce that sets this valuation apart? Under the surface lies a mix of ambitious earnings growth targets, projected profit margin expansion, and a critical future profit multiple the crowd is banking on. Will Nokia’s financial evolution match the bold scenario that drives this fair value? Click to see what numbers the narrative is really betting on.

Result: Fair Value of €4.53 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent currency headwinds or further setbacks in Nokia’s Mobile Networks segment could quickly challenge the bullish narrative and restrain future gains.

Find out about the key risks to this Nokia Oyj narrative.

Build Your Own Nokia Oyj Narrative

If you have a different take or enjoy making your own investment calls, the tools are here to build your own Nokia Oyj view in just a few minutes. Do it your way.

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A great starting point for your Nokia Oyj research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include NOKIA.HE.

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