After Settling Iwatani Lawsuit, Nel ASA Faces a Steeper Climb: Orders Tumble 73% and Inflation Data Looms

Norwegian hydrogen firm Nel ASA pays $10.5 million to end Iwatani lawsuit, yet a 73% plunge in new orders overshadows legal relief. Stock down 21.6% on week.

Nel ASA has put a costly legal dispute behind it, but the Norwegian hydrogen specialist is far from out of the woods. The company and its former subsidiary Cavendish Hydrogen have agreed to pay a combined $10.5 million to end a lawsuit with Iwatani Corporation of America over hydrogen refueling station equipment in California. The settlement, which carries no admission of liability, removes a nagging overhang on the stock, yet investors are already looking past the legal relief to a far more worrying problem: a drastic collapse in new orders.

The market’s reaction has been muted, overshadowed by a global selloff in risk assets. Nel shares closed at €0.26 on Friday, down 21.63% on the week, and remain 29.14% below their 52-week high of €0.37. While the stock has climbed 35.11% year-to-date, the annualized 30-day volatility of nearly 105% underscores the extreme nervousness surrounding the name. The settlement itself was not enough to arrest the slide, as stronger-than-expected US jobs data—172,000 new positions in May—pushed the probability of a 2026 rate hike to 74.4%, a headwind for growth stocks across the board.

The legal wrangling began in February 2024 and centered on contracts for hydrogen fueling equipment in California. Nel will pay $7.5 million, while Cavendish adds $3 million, and both sides have left the door open for future cooperation. Management says the deal eliminates ongoing legal costs and reduces litigation risk in the US. For a company already under operational pressure, that is a welcome distraction removed, but it does not generate a single new sales order.

And it is the order book that really stings. In the first quarter, Nel reported revenue of NOK 148 million, down 5% year-on-year. Far more alarming, order intake plunged 73% to just NOK 85 million, while the order backlog shrank 24% to around NOK 1.113 billion. The cash position remains a relative bright spot at NOK 1.443 billion, offering a buffer to weather the dry spell, but analysts are skeptical. The average price target sits at NOK 2.118, and the consensus rating is "Underperform", signaling little confidence in a near-term rebound.

Technically, the stock is hovering right around its 50-day moving average of €0.26, a level that could determine the next directional move. The brief spike to €0.36 during a recent rally showed that buyers can emerge on good news, but the sustainability of any advance hinges on a visible improvement in order intake—something the settlement does not address.

The coming days will provide fresh catalysts. On June 10, the US releases consumer price inflation data, followed by producer prices on June 11. The European Central Bank also meets that week to decide on monetary policy. For Nel and the broader hydrogen sector, these macro events could prove decisive. Investors are watching to see whether the next move is driven by a genuine operational turnaround or merely a temporary relief rally on a cleared legal slate.