Bernstein Research analyst Pierre Ferragu didn’t say that Nokia should go back to making boots in his note to investors on Wednesday, but he came pretty close. Citing Nokia’s inability to adapt in a fast-changing market, Ferragu cut his rating on Nokia stock to under-perform and dropped his price target from $7.33 to $4. “In a fast changing market, Nokia is losing ground very rapidly,” the analyst writes. “The profit warning for the second quarter provided evidence that the next couple of years will prove very challenging, with the gross margin and market share trends of the last 4 quarters continuing, if not accelerating even more. The collaboration with Microsoft now appears to us unlikely to be successful, as Nokia’s brand is losing ground too fast and the window of opportunity for an alternative ecosystem is vanishing rapidly. Even modeling a scenario in which Nokia stabilizes next year leads us to believe that the stock will under-perform over the next twelve months.” Ferragu believes Nokia’s smartphone market share will be cut in half in the second quarter of 2011 compared to the same quarter a year earlier, dropping from 38% to just 19%, and he expects Nokia’s overall cell phone market share to slide from 35% to 30%.