Nel (Sell, TP: NOK9.00) - Misunderstood excitement
We believe yesterday’s 21% share price gain on a neutral Q3 report was driven by short-covering and some consensus participants being excited by a revenue beat despite EBITDA below expectations, the logic of which we find hard to follow. Nel also announced a 100% rise in its pipeline value while volume was up only 10%, which puzzles us a little. We have cut our 2022e due to a lack of recent orders, and 2023e on general slowness in the hydrogen space. We reiterate our SELL and have cut our target price to NOK9 (10).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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