Nel (Sell, TP: NOK2.00) - Valuation premium remains
Nel’s valuation remains at a premium to key European peer Nucera, despite the stock trading down 54% YTD and 33% in the past month. For its large uncollected receivables, a social media update suggests a delayed startup of a likely involved project (2028), making it challenging for Nel to collect. Hence, it may re-sell the equipment, a scenario it previously mentioned. Regardless of a more upbeat management, new orders have been absent. Should it secure meaningful new orders, we see potential for a short-lived positive share price reaction. Still, we reiterate our SELL and have reduced our target price to NOK2 (2.5), based on peer group valuation and DCF.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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