Underlying trends still under pressure Nokia''s Q2''24 underlying operating profit was well below consensus and FY''24 guidance was downgraded suggesting Nokia is not out of the woods. We cut our TP on the EUR-shares by 5% (ADR -7%) and retain our Neutral rating on the stock, and our generally cautious stance on European CommTech. What did we learn that we did not know pre-Q2''24? 1) ATandT revenues were accelerated by EUR150m, but ATandTs contribution will likely halve in FY25 and then fall further in FY26. More positively there should be a matching NWC inflow - and NWC was generally quite solid in Q2''24. 2) Ambitious H2''24 NI guide. Nokia still expects a very sharp NI rebound in H2''24 and particularly Q4''24. This requires underlying operating profit to go from around EUR400m in Q2/Q3''24 to EUR500m in Q4''24, i.e., a large step-up, which is clearly ambitious. 3) Operating environment is still challenging. The overall tone on MN in our view remains fairly cautious and the German vendor restrictions were ''not needle-moving''. Nokia is more upbeat on the rebound in NI, even if this is taking a little longer to materialise and NI revenues will inorganically be held back by ASN deconsolidation. Has our investment view changed? No We discussed the long term challenges for the RAN market in our report Boulevard of Broken Dreams earlier this year, and we believe this remains an overall headwind. However, we have a relative preference for Nokia over Ericsson given Nokia''s higher exposure to the healthier fixed market over mobile. On a relative basis, we''d note the Nokia/Ericsson spread has widened (23% in -3M) and could tighten given they ultimately face many of the same issues. Changes to estimates We cut FY25E EPS by 6% to reflect cuts to our NI and CNS forecasts. The stock is cheap on ~11x FY25 PE, but with little growth potential, we see only modest upside.