Nel (Sell, TP: NOK3.50) - Headwinds remain
Q2 revenues and earnings missed our estimates and consensus, and a weak operating performance together with higher-than-expected capex (timing issue) and the fuelling spin-off saw cash dropping by NOK1bn QOQ to NOK2.2bn. Order intake was also weak, resulting in the backlog sliding by 13% YOY. As usual, management remained optimistic on new orders; we believe recent agreements (Reliance and Hy Stor Energy) could materialise in firm orders at some point, but Fortescue (one of its customers) today scaled back its hydrogen ambitions. We have cut our 2025e sales by 10%, and with the valuation still looking stretched, we reiterate our SELL and NOK3.5 target price.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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