Nel ASA Faces a Pivotal Year Amid Persistent Market Skepticism

Nel ASA NO0010081235

Shares of Nel ASA have continued to struggle into early 2026, trading near their all-time lows in the range of NOK 2.23 to NOK 2.25. Despite a major strategic investment decision made in December 2025, the stock has failed to stage a sustained recovery. This ongoing weakness reflects persistent investor doubts regarding the hydrogen sector's near-term prospects.

The stock's performance has been under consistent pressure, down more than 20% year-on-year. Trading over the past twelve months has been volatile, with the share price fluctuating between NOK 1.95 and NOK 3.61, highlighting the risks associated with this pure-play hydrogen investment. Recent trading volume has also been subdued, falling below the average daily turnover of approximately 4.1 million shares.

Market capitalization has dwindled to around NOK 4.1 billion, a stark contrast to the peak valuations seen during the previous wave of hydrogen enthusiasm. The shares are currently changing hands below book value, with a price-to-book ratio of about 0.87, underscoring the pronounced skepticism prevailing among many investors.

Operational Headwinds and Strategic Shifts

A core operational issue remains the declining order backlog. According to the latest figures, the backlog has shrunk by roughly 47% over one year to approximately NOK 984 million. This significant reduction in revenue visibility is a primary factor keeping institutional investors on the sidelines.

The company has also faced project delays with customers, leading it to begin reclaiming equipment tied to overdue receivables. Operational adjustments were initiated earlier, with Nel announcing a workforce reduction of about 20% in January 2025 and temporarily halting production at its atmospheric alkaline manufacturing facility in Herøya.

A Major Bet on Next-Generation Technology

In a key strategic move during the latter half of December 2025, Nel's board gave the final green light to industrialize its Next-Generation Pressurized Alkaline platform at its Herøya site in Norway. The project's key parameters include:

• Total Investment: Roughly NOK 300 million for an initial capacity of 1 GW.
• EU Support: Up to EUR 135 million in funding from the EU Innovation Fund.
• Scalability: The platform's capacity is designed to be expandable to 4 GW.
• Timeline: A commercial launch is slated for the first half of 2026, with industrial-scale deliveries beginning in 2027.

This new, modular container-based platform aims to substantially reduce the levelized cost of hydrogen (LCOH). However, the market's reaction to the announcement was fleeting; after a brief uptick, the share price resumed its downward trajectory.

Analyst Sentiment and Glimmers of Hope

Covering analysts, primarily based in Europe and on Wall Street, maintain a cautious stance. The consensus rating is 'Underperform,' with an average price target clustering between NOK 2.22 and NOK 2.28. Targets from the 14 analysts covering the stock vary widely, from NOK 1.20 to NOK 4.20, indicating substantial uncertainty about both the broader hydrogen market's development and Nel's ability to execute its technology roadmap successfully.

Despite the challenges, there have been positive developments. In November 2025, Nel secured a major PEM electrolyzer order valued at over USD 50 million for the Norwegian HyFuel and Kaupanes hydrogen projects. This contract stands as the second-largest in the company's history and its largest PEM order to date.

Furthermore, Samsung E&A has launched its CompassH2 hydrogen plant solution, which utilizes Nel's alkaline technology. This partnership could open up additional sales channels and strengthen Nel's positioning in future project bids.

The Crucial Test Ahead

The coming months represent a critical proving ground for Nel ASA. The key question is whether the stock can begin to recover from its multi-year decline—which has left it more than 93% below its 2021 peaks. Success will likely hinge on the company's ability to successfully commercialize its new pressurized alkaline platform, secure further large-scale orders, and demonstrate tangible improvements in its financial performance. For investors, 2026 is set to be a decisive year.