Nel (Sell, TP: NOK5.00) - Soft H2, mixed expansion news
Q2 revenues and the backlog (the high point of the results) beat our estimates. However, we have lowered our H2 2020 estimates after management guided for a continued Covid-19 impact and a flattish performance going forward. Installation of the new production line has yet to get under way, but the company upped the planned capacity and pushed ramp-up from Q2 to Q3 2021. With the valuation looking stretched on long-term estimates and margins adjusted for the ramp-up and one-offs still negative, we reiterate our SELL and NOK5 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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