Nel ASA Shares Face Mounting Headwinds

Nel ASA NO0010081235

A combination of disappointing order intake, declining revenue, and overwhelmingly negative analyst sentiment continues to weigh heavily on the equity of Nel ASA. The hydrogen technology specialist is grappling with internal challenges within an already difficult market environment for green energy. The upcoming financial report is now viewed as a critical test for the stock's near-term direction.

The stock's difficulties are intrinsically linked to broader pressures within the hydrogen sector. While policy initiatives like the EU Hydrogen Bank and the US Section 45V tax credit provide a supportive long-term framework, significant practical hurdles persist. The high cost of producing green hydrogen and a slower-than-anticipated rollout of necessary infrastructure have created an uncertain market. For electrolyser manufacturers like Nel, this translates directly into heightened risk perception and reduced investor willingness to assign a higher valuation.

Fundamental Metrics Show Significant Weakness

The most recent quarterly figures are a primary source of the current valuation pressure. For the third quarter of 2025, revenue from customer contracts fell 17% year-over-year to 303 million Norwegian kroner (NOK). The weakness is most apparent in new business.

Order intake collapsed by 64% to just 57 million NOK. This has a direct impact on the order backlog and signals a pronounced cooling in demand for Nel's solutions. Although the company's cash position of approximately 1.8 billion NOK remains a positive highlight, the combination of falling sales and severely shrunken new orders is currently defining market sentiment far more powerfully.

Market Analysts Maintain a Cautious Stance

The prevailing view among market researchers remains decidedly pessimistic. The current consensus rating for Nel ASA is "Sell," based on assessments from 12 analysts. Eight have issued sell recommendations, six advise holding the stock, and not a single analyst currently recommends buying.

The average 12-month price target stands at 2.21 NOK, suggesting potential downside from recent trading levels. This outlook reflects widespread uncertainty regarding the company's near-term growth trajectory and profitability.

Key Market Factors and Upcoming Catalyst

Several concrete factors are shaping the stock's current performance:

• Recent Trading Activity: In a recent session, Nel was among the weakest performers on the Oslo exchange, declining 1.40% to 2.26 NOK.
• Revised Targets: A data aggregator reported a 7.9% reduction in the consensus price target to 2.23 NOK, citing lowered growth expectations.
• Industry Headwinds: Elevated production costs and the delayed expansion of hydrogen infrastructure continue to act as a brake on the entire market.
• Next Major Catalyst: The company is scheduled to release its fourth-quarter and full-year results on February 26, 2026. This event is poised to become the next crucial benchmark for the stock's valuation.

All eyes are now on whether Nel's report and guidance in late February can convincingly outline a path for the company to return to stronger growth in both revenue and orders within this challenging operational climate.