Nel (Sell, TP: NOK11.00) - Near-term challenges remain
Although near-term earnings are not our primary basis for valuing Nel, we see a risk of soft results and negative estimate revisions, which usually mean bad news for the share price. We are 25% below consensus on Q2 EBITDA and note that order intake has been slow lately. While we expect orders to materialise in the coming quarters, we maintain that industry-wide margin pressure is likely, given significant capacity expansion among electrolyser manufacturers. We reiterate our SELL and have cut our target price to NOK11 (12) on a lower peer group valuation.NEL ASA develops diagnostic tests for early detection of diseases. Co.'s patented method is based on identifying disease-specific gene expression signatures from sample materials, such as blood. Co.'s products in development phase include MCItect, for patients with Mild Cognitive Impairment (MCI) aimed to detect Alzheimer disease within two years prior to onset of dementia, and ADtect, for the detection of mild to moderate Alzheimer disease, as well as one project in discovery phase, namely AMYtect, for brain amyloid detection.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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