Nel ASA: A 20% Rally That Wall Street Won't Touch

Nel ASA's new electrolyser platform promises 40-60% cost cuts, yet 8 of 12 analysts rate sell as revenue falls and order backlog shrinks; shares up 20%.

The gap between what investors are betting on and what analysts see at Nel ASA has grown to a chasm. On Monday, the Norwegian hydrogen company's shares surged more than 20% in Oslo, hitting 2.61 Norwegian kroner, after the commercial launch of a new pressurised alkaline electrolyser platform. Yet not a single one of the 12 analysts covering the stock recommends buying it — eight say sell, and the rest say hold. Their average price target of 2.13 kroner sits well below the current market price.

That dissonance captures the central tension: a technology breakthrough that promises to slash costs versus a business that is still burning cash and watching its order book shrink.

A Cheaper Electrolyser Changes the Math

After eight years of development, Nel has unveiled a platform it says can cut investment costs for electrolyser plants by 40% to 60%. For a standard 25-megawatt unit, the company is targeting turnkey costs below $1,450 per kilowatt — roughly half the industry norm. The claim is that lower capital expenditure and shorter project timelines could finally make green hydrogen economics work at scale.

The platform is being readied for series production at Nel's Herøya facility in Norway, where capacity is slated to reach one gigawatt per year. The European Union is backing the ramp-up with funding in the hundreds of millions of euros. A separate EU grant of €11 million is expected to hit Nel's books in the second quarter of 2026.

Utility Sector Opens a New Front

Alongside the product news, Nel disclosed its first-ever order from a public utility. The Douglas County Public Utility District in Washington state has placed a roughly $7 million order for a containerised PEM electrolyser. The unit will convert surplus hydropower into green hydrogen, protecting turbines from the wear of frequent cycling. Delivery and commissioning are scheduled for the first half of 2027, with the stacks made at Nel's plant in Wallingford, Connecticut.

A second, identically valued PEM order came in the same period from Mesure Process, a subsidiary of Synqo Energies, for a European project combining hydrogen refuelling stations and industrial use. CEO Håkon Volldal framed both deals as evidence that Nel is successfully diversifying beyond traditional industrial clients into energy infrastructure and, increasingly, defence and security markets. "I don't think it's controversial to say we need to reassess our energy system," he said. On-site hydrogen production, he argues, cuts reliance on centralised grids — a selling point that resonates when energy security is a political priority.

The Numbers Tell a Blunt Story

The first quarter of 2026, however, offered no cause for celebration. Revenue came in at 152 million Norwegian kroner, while EBITDA was a loss of 100 million kroner — an improvement of 15 million from a year earlier, but still deep in the red. Customer revenue alone fell 5% year-on-year to 148 million kroner. The order backlog shrank 24% from the prior year to about 1.1 billion kroner, despite the two new PEM contracts.

Cash and equivalents stood at roughly 1.4 billion kroner, enough, management says, to cover operations through the end of 2026. Nel has already cut its workforce by 26% from its peak, a painful but necessary streamlining. The next big test comes on July 15, when the company releases its half-year results. Volldal says he is actively negotiating projects in Europe and North America with capacities between 50 and 150 megawatts — but investors are waiting to see whether those talks turn into signed contracts.

Insider Confidence Meets Analyst Doubt

Board chair Arvid Moss added a personal vote of confidence by buying 100,000 shares at an average price of 2.25 kroner. The market took note, but the analyst community remains resolutely sceptical. Berenberg and Citigroup have both cut their price targets recently, with Morgan Stanley going to 2 kroner and Citi to 2.40 kroner. Their caution centres on valuation risk and the persistent gap between Nel's aspirations and its near-term cash generation.

At the Frankfurt exchange, Nel shares trade at €0.26, roughly 18% below their 52-week high from May. Despite the rally, the stock has still gained more than a third since the start of the year. Whether that momentum can hold depends on whether the next set of quarterly numbers shows that the pipeline optimism is finally translating into revenue.