Nel ASA: A Stock Rally That Analysts Refuse to Endorse

Nel ASA shares hit a 52-week high despite a 73% drop in orders and a consensus sell rating. New electrolyser platform launches without contracts, while insider buying offers a glimmer of hope.

The disconnect between Nel ASA’s share price and its underlying business has rarely been starker. While the hydrogen specialist’s stock has surged roughly 37% since the start of the year, hitting a 52-week high of €0.32 in early May, the company’s order book tells a far grimmer story. The shares have since slipped back to €0.26, and not a single analyst on Wall Street is willing to recommend buying them.

Orders in Freefall

The first-quarter numbers explain the scepticism. Nel’s order intake collapsed by 73% to just 85 million Norwegian kroner, while the order backlog shrank to 1.1 billion kroner. Revenue fell to 152 million kroner, though the net loss narrowed to 144 million kroner, helped by a cost-cutting drive that saw the workforce reduced by roughly a quarter.

Berenberg analyst James Carmichael cut his price target to 2.30 kroner, pointing to the persistently weak order flow. The average Wall Street target now stands at just 2.14 kroner, and the consensus recommendation is to sell.

A New Platform, But No Orders Yet

Management is betting on a fresh start. After eight years of development, Nel has launched a new pressurised alkaline electrolyser platform that operates at 15 bar, reducing the need for downstream compression and boosting energy efficiency. The modular system is now ready for the market, with the company targeting annual production capacity of up to one gigawatt at its Herøya facility in Norway.

Sales chief Todd Cartwright says customer priorities are shifting toward decentralised energy production and grid stability, with defence companies and infrastructure operators demanding more flexible systems. But so far, the new platform has generated only discussions, not contracts.

Balance Sheet Risk in Herøya

There is a further headache lurking in the accounts. Management is reviewing the book value of two mothballed production lines at Herøya that were built for atmospheric alkaline electrolysers — technology that has been superseded by the new pressurised platform. Any write-down would add to the financial strain after last year’s hefty impairment charges.

Bright Spots in PEM

The picture is not entirely bleak. Nel’s PEM division secured fresh contracts after the quarter closed, each worth around $7 million. One buyer is a public utility in Washington state that plans to use the system for grid stabilisation. A European customer placed a similar order for the same amount.

There is also political tailwind. Public consultation began in early May for the BarMar pipeline, a project that will connect Barcelona to southern France and aims to transport two million tonnes of renewable hydrogen annually by 2030.

Insider Confidence

Despite the operational weakness, the board is putting its money where its mouth is. Chairman Arvid Moss bought 100,000 shares shortly after the results, paying an average price of 2.25 kroner. The company’s cash reserves of 1.4 billion kroner provide a cushion, covering operations through to the end of 2026.

All eyes will be on 15 July, when Nel reports its first-half results. That is when management must prove that the new pressurised alkaline platform can actually generate orders — and whether the Herøya write-down threat will become a reality. Until then, the stock’s rally rests on hope rather than hard evidence.