Nel (Sell, TP: NOK7.00) - Too-high expectations
One of Nel’s key peers, ITM Power, traded down 25% yesterday following a disappointing results announcement with 2023 revenue guidance c40% below Bloomberg consensus. We believe Nel might also face negative estimate revisions ahead. Consensus 2023 revenues have come down 18% over the last six months, but we still believe the current expectation of 70% YOY revenue growth is too high, and we are 13% below consensus for 2023e. Combined with Nel being priced more expensively than peers (c90% premium on peer group EV/sales), this leads us to 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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