Nel (Sell, TP: NOK7.00) - Profitability even further away
In a highly competitive environment where building a track-record is paramount, we welcome Nel’s decision to pursue further expansion by adding another 500MW production line at Herøya. However, its expansion capex was almost twice our forecast, and we consider Nel far from fully funded to meet its 10GW capacity target. Given the weaker gross margin and higher fixed-cost base in Q2, we calculate it needs to increase revenues five-fold just to break even. We have cut our estimates and see 40% downside potential on peers’ EV/sales; thus, we reiterate our SELL and NOK7 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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.