Nel ASA Faces a Defining Moment on July 15 as New Electrolyser Platform Tests Investor Patience

Nel ASA's shares surge 42% on hydrogen hope, but analyst consensus is 'underperform' as order intake plunges 73% and revenue falls.

The gap between Nel ASA’s stock price and its underlying business has rarely been wider. While the Norwegian hydrogen equipment maker’s shares have surged nearly 42% over the past month to close at €0.30 on Friday — a 5.82% single-day gain — the company enters the week just 6% shy of its 52-week high. That buoyant mood, however, rests on hope rather than hard numbers. The half-year report due on July 15 will reveal whether the narrative of a technological turnaround can outweigh a deteriorating order book.

The market’s optimism has run well ahead of what analysts consider reasonable. The average target across 13 ratings stands at around 2.12 Norwegian kroner, with the consensus leaning toward a rare “underperform” call. Berenberg recently trimmed its target to 2.30 kroner from 2.60, and Citigroup followed suit by cutting to 2.40 kroner. At current levels, the stock trades well above the average analyst estimate — a clear signal that investors are betting on a future that has yet to materialise in the financials.

That future hinges squarely on a new pressure-alkaline electrolyser platform, launched commercially at the Herøya site in May after eight years of development. Management promises notably lower capital costs per megawatt than either conventional alkaline or PEM systems, alongside improved yields and shorter cycle times. The company has taken a final investment decision to build up to 1 gigawatt of production capacity at Herøya, with the first stage expected to be operational by year-end and a target of 500 MW installed by the end of 2026. Total spending before grants is estimated at roughly 300 million kroner. The long-term ambition is 4 GW annually.

The platform’s launch has been backed by substantial public support. Nel secured a commitment of up to €135 million from the EU Innovation Fund, with an initial €11 million tranche expected in the current quarter. That injection helps explain why the stock has clawed back so sharply from its 12-month low of €0.18, but it does not solve the core problem: a dearth of large-scale orders.

In the first quarter, revenue from customer contracts slipped 5% year-on-year to 148 million kroner. More alarming was the 73% plunge in order intake to just 85 million kroner, while the order backlog contracted 24% to 1.1 billion kroner. Nel has already trimmed its workforce by 26% from peak levels and holds liquidity of 1.4 billion kroner, which management says can sustain operations into 2026. That provides a cushion but cannot substitute for new volume.

A few small bright spots have emerged from the PEM division. Nel secured two orders worth roughly $7 million each — one from Mesure Process, a subsidiary of Synqo Energies, to supply containerised units for a European hydrogen project targeting fuel stations and industrial customers; the other from Douglas County Public Utility District in Washington State, marking the first purchase of Nel’s PEM technology by a US public utility. The stacks will be built in Wallingford, Connecticut, with commissioning expected in the first half of 2027. Strategically, the utility deal opens a channel beyond traditional industrial applications.

Still, these are niche wins. Chief Executive Håkon Volldal has pointed to advanced discussions for projects in the 50 to 150 MW range — precisely the scale that could begin to fill the pipeline. The July 15 report will be an early test of whether those talks are converting into binding commitments, especially for the new alkaline platform. A lack of fresh orders would make the recent rally look increasingly fragile.

Meanwhile, two existing 500 MW alkaline lines at Herøya remain idle, raising the risk of impairments as the new platform ramps up. Nel frames hydrogen increasingly as an energy-security play, a narrative that has helped lift the sector broadly alongside the broader clean-energy rally. But for the stock to hold its gains, the story must soon be backed by numbers.