Just getting started

The clear no. 1 in a market set for a ~30% volume CAGR. Day rates going to all-time highs as developers rush to reserve capacity. Share could double over next three years – BUY.

Private markets seen cooling down

Renewable energy stocks have benefitted from higher private market valuations, despite elevated interest rates and lower power price expectations hitting project economics. We believe this is due to the tight supply/demand balance, underpinned by record-high infrastructure funds available for investment. As the private capital surplus diminishes with lower fundraising and more transactions, we see a risk of the sector valuation reverting. Among the names we cover, Scatec had the highest valuatio...

Norway: Rebound to continue

Positive or neutral estimate revisions for most companies. Best risk/reward over Q2 in Crayon, Link, NOD. Top picks: Atea, Crayon, Link, Pexip.

Renewable Weekly – 14 June 2024

This week, we look at the effect of AI/data centres on power demand.

Eolus Vind AB: 2 directors

Two Directors at Eolus Vind AB bought 3,985 shares at between 77.500SEK and 77.880SEK. The significance rating of the trade was 51/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the l...

FX tailwinds will fade

Renewable Weekly – 6 June 2024

On aggregate, the R&C stocks outperperformed the MSCI Nordic by ~1% throughout the reporting season (16 Apr to 6 Jun).

Elmera Group (Sell, TP: NOK23.00) - Sourcing funding

We reiterate our SELL as we still find the valuation demanding, but have raised our target price to NOK23 (21) to reflect raised estimates on a higher-than-expected EBIT guidance. For Q2, we are above consensus and expect focus to be on the necessary new bank financing.

Hexagon Composites (Buy, TP: NOK40.00) - In it for the long haul

The recent sale of Ragasco focuses Hexagon Composites on the high-pressure gas equipment business, where we believe it has the strongest growth prospects with natural gas vehicle (NGV) deployment set to grow with improved technology, a lower cost of ownership relative to diesel and greater interest in sustainability. This should boost RNG production, and in turn increase mobile pipeline demand. We reinstate our recommendation with a BUY and NOK40 target price.

Elmera Group (Sell, TP: NOK21.00) - EBIT guidance marginally above, fi...

Elmera Group this morning announced new financial targets at its CMD. It is targeting revenue growth for all segments in 2024–2025, stable nominal opex and adj. EBIT of NOK550m–600m, marginally above consensus. It also announced changes to its power sourcing model that could have a significant impact on NIBD in 2025; however, the financing has not yet been finalised. We believe a neutral share price reaction is warranted.

Targets 4-5% better, Consumer to grow

Updated targets imply 4-6% upside to adj EBIT. Expecting revenue growth for all segments, relief in our view.

Deep value

Transaction value ~NOK 65/share. Earnings momentum from Q2'24 - first vessels in operations. Attractive valuation - BUY, TP of NOK 65 (55)

Another big deal in the space

Nel (Sell, TP: NOK3.50) - Unwarranted share price gain

Nel’s share price is up 83% over the past month and its EV is up 145%. It is trading at a 2025e EV/sales of 3.2x on our estimates (4.0x on consensus), significantly above closest peers Nucera of 0.6x and Plug Power at 2.1x. Due to its multiples expansion, peer multiples now suggest c30–60% downside to Nel’s current share price. We believe the fuelling spin-off, Reliance agreement and EU mobility hydrogen news have increased investor focus on Nel and created near-term excitement, but struggle to ...