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Nokia (NOK) Surges 9.5%: Is This an Indication of Further Gains?

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Nokia (NOK - Free Report) shares rallied 9.5% in the last trading session to close at $5.88. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 1.5% loss over the past four weeks.

NOK’s rally is driven by its decision to raise full-year 2021 financial guidance ahead of second-quarter earnings release on Jul 29. Fueled by the 5G wireless equipment maker’s business resiliency, technology leadership and cost control initiatives, it anticipates a stronger June quarter.

Further, back-to-back 5G network deployment contracts from multiple telecom operators owing to restrictions in Huawei gear’s usage over national security concerns are proving to be a major driving factor. Thanks to its accelerated strategy execution and sharpened customer focus, Nokia is on track with its three-phased plan to achieve sustainable, profitable growth. We believe that the stock has more upside left.

This technology company is expected to post quarterly earnings of $0.06 per share in its upcoming report, which represents a year-over-year change of -14.3%. Revenues are expected to be $6.32 billion, up 12.8% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Nokia, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on NOK going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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