Nel (Sell, TP: NOK3.00) - Headwinds remain strong
While management has remained optimistic, orders have been few and far between, and most recently a large capacity reservation agreement was cancelled. We see growing impairment risk, as payments from one of its largest clients still appear to be missing (c30% booked 2023 revenues). Focus ahead will be to minimise cost burn, while still searching for new orders to support utilisation of its recent capacity additions. We reiterate our SELL, with a reduced target price of NOK3 (3.5).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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