Fulcrum Ups Nokia to Buy, Citing Pricing Power - TheStreet

Fulcrum Global Partners upgraded shares of

Nokia

(NOK) - Get Report

Tuesday based on its optimistic outlook for the cellular phone market.

Analyst Walter Piecyk increased his 2004 estimate of phones sold industrywide to 495 million from 450 million, and also raised estimates on the number of phones sold by Nokia to 200 million from 182 million, which implies 40.4% market share.

Nokia can maintain profit margins in its cellular-phone unit above 23% in 2004, Piecyk believes. He raised his investment rating on the company to buy from neutral with a $24 target price.

"We believe the near term impact to average sale prices and margins expected in the third quarter is a temporary move by Nokia to gain market share ahead of a potential acceleration in the mobile phone industry," Piecyk wrote in a research report.

The analyst raised his 2004 earnings projections to 0.92 euro a share from 0.76 euro.

Risks to Piecyk's thesis could be slower acceleration in the cell-phone replacement cycle and pricing pressure from new candidates in the cell-phone market.

Shares of Nokia were recently up 21 cents, or 1.2%, at $17.05.