Nel (Sell, TP: NOK7.00) - Hit from multiple angles
After having defied gravity for years, Nel is being hit from multiple angles. Not only does the recent leadership change create uncertainty, but the equity market’s willingness to value Nel at lofty EV/sales multiples also appears to have faded. From an industrial perspective, competitors continue to aggressively expand manufacturing capacity and have secured more orders than Nel, likely adding to downward pressure on pricing. While we believe large orders should eventually unfold for Nel, this should be widely expected. We maintain our SELL and have cut our target price to NOK7 (9).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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