Nel (Sell, TP: NOK7.00) - Still looks overvalued versus peers
Nel’s recent large-scale contract wins have helped build revenue visibility for 2023–2024. At the same time, we see investor focus shifting towards margins and profitability, which have been very weak in recent quarters. We forecast Q3 EBITDA of NOK-162m, above consensus of NOK-173m, and we expect focus to be on margins and comments related to profitability, which we believe will remain challenging. We continue to find the stock overvalued versus peers, as peer-group 2023–2024e EV/sales suggest 33% downside potential to the current share price. 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.
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