Nel (Sell, TP: NOK3.50) - Unwarranted share price gain
Nel’s share price is up 83% over the past month and its EV is up 145%. It is trading at a 2025e EV/sales of 3.2x on our estimates (4.0x on consensus), significantly above closest peers Nucera of 0.6x and Plug Power at 2.1x. Due to its multiples expansion, peer multiples now suggest c30–60% downside to Nel’s current share price. We believe the fuelling spin-off, Reliance agreement and EU mobility hydrogen news have increased investor focus on Nel and created near-term excitement, but struggle to see these items changing the investment case. 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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