Nel (Sell, TP: NOK4.50) - Mind the premium – c35% downside to peer group valuation
Despite trading down 10% today, hitting its lowest share price since 2019, Nel continues to trade at a premium to peers. Based on consensus EV/sales for other large cap electrolyser peers, we estimate a fair equity value of cNOK4.5 per share, representing c35% downside risk from current trading levels. As highlighted yesterday, we believe a key read-across from the contract termination is: 1) increased focus on backlog quality (its largest client YTD has failed to make timely payments); and 2) growing uncertainty about the outlook for hydrogen. We reiterate our SELL and target price of NOK4.5.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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