Good set of Q1 earnings Nokia beat Q1 top line expectations by 8% and recorded operating margins of 10.9% versus consensus expectations of 2.8%. Mobile Networks grew 2% ccy driven by strong 5G momentum particularly in North America. Within Networks Infrastructure, IP Networks (+22% ccy), Fixed Networks (+49% ccy) and Submarine Networks (+57% ccy) delivered strong revenue growth. IP Networks benefited from the semiconductor supply chain crunch, where Nokia won customers from competitors that have not been able to deliver shipments. Strong fiber and broadband demand more than offset declines in copper infrastructure within Fixed Networks. Submarine Networks continue to see order book momentum. Despite the strong Q1, Nokia left FY guidance unchanged but has pointed to achieving the top end of the margin guidance. This caution is driven by 1) ramping Verizon share loss impact throughout the year, 2) venture fund positive performance not recurring, 3) ramping of RandD, 4) OPEX in Q1 was lower than usual due to lower SGandA spend and reversal of loss allowances, and 5) upcoming cash flow impacts of inventory builds and incentive payments. Verizon impact to ramp throughout the year While North America demonstrated strong 5G momentum in Q1 for Mobile Networks, management commented that the Verizon impact started in the second half of 4Q20 and is expected to increase throughout this year. This will also contribute to less than expected revenue seasonality for the rest of the year. Pricing pressures in North America (separate from Verizon loss) are also expected to persist throughout the year, suggesting Q1 was not the peak of headwinds. Remain Neutral on Nokia, but raise target price Nokia executed well in Q1, but the Verizon impact is expected to ramp throughout the year, 1Q OPEX was called out to be lower than usual with RandD also expected to ramp, and it remains to seen whether benefits seen at IP Networks due to the semiconductor crunch is...