Trefis Morning Coffee – Nokia, Silver Wheaton & Hewlett-Packard

This morning we look at Nokia’s (NYSE:NOK) surprise announcement yesterday where it lowered its margin outlook and sales targets. The company also alluded to some challenges in its China business. The stock was punished by 15% and from pre-market trading it looks like it will suffer further today. We update our estimates and maintain a $9+ price estimate implying around 30% upside. Today we also look at Silver Wheaton’s (NYSE:SLW) average realized silver price per ounce forecast as a key driver to our $43 price estimate. Finally we test your knowledge with a pop quiz on HP’s (NYSE:HPQ) desktop market share.

Nokia – Company of the Day

Nokia announced Tuesday that the company’s 2011 quarterly sales and margin targets in the mobile phone business are no longer valid. Nokia attributed this revised forecast to a mix of competitive pressures impacting margins and market share as well as some mismanagement in the company’s China business. The company has been facing challenges from Apple’s (NASDAQ:AAPL) iPhone, Google’s (NASDAQ:GOOG) Android phones as well as low-cost feature phone competition in emerging markets.

Silver Wheaton – Average realized silver price per ounce forecast

Silver is both an industrial metal and a precious metal. As an industrial metal silver has many thousands of uses due to its outstanding qualities. Silver has the highest electrical and thermal conductivity of any element. Over the last 100 years the price of silver and the gold/silver price ratio has fluctuated greatly due to fluctuation in the industrial and retail demand.

More recently investors have used silver as a hedge against a declining US Dollar and a hedge against inflation due to the combination of loose monetary policies and economic growth which has spurred a massive rally in commodities.

Quiz of the Day