Nel ASA Shares Show Signs of Technical Rebound

Nel ASA NO0010081235

Nel ASA is entering the new year with some positive momentum. The hydrogen technology company's stock, after a prolonged downtrend, appears to be attempting to establish a base. A key technical development occurred yesterday when the share price moved above its 50-day moving average. This shift is being attributed to the company's December decision to expand capacity at its Herøya facility and double-digit percentage gains in the initial trading sessions of 2026. The critical question for investors now is whether Nel can execute its strategic realignment as planned.

Compared to several competitors facing financial strain, Nel approaches 2026 with a robust balance sheet. As of September 30, 2025, the company held cash and cash equivalents of 1.76 billion Norwegian Krone (NOK).

Operational results for the third quarter of 2025 revealed a decline in contract revenue to 303 million NOK. However, cost-reduction initiatives showed a positive impact, with the EBITDA loss narrowing significantly year-over-year from -90 million NOK to -37 million NOK.

The broader hydrogen sector has also enjoyed a positive start to the year. Industry peers such as Plug Power and thyssenkrupp nucera have similarly posted double-digit share price increases in the first trading days of 2026.

Despite this short-term recovery, the stock remains under medium-term pressure. Since the beginning of December 2025, its performance stands at approximately -4.2%, and the price continues to trade about 2.3% below the 200-day moving average, indicating the overarching downward trend remains intact.

In yesterday's session, the equity gained roughly 1.6% to close near 0.196 euros, crossing above the 50-day average situated at 0.20 euros. Previously, the stock had hit a 52-week low around 0.166 euros in recent months.

Strategic Pivot Centered on Herøya Expansion

A focal point for the company is the final investment decision made in December 2025 to industrialize its "Next Generation Pressurized Alkaline" platform at the Herøya site. This project represents a clear technological shift for Nel.

Key details of the initiative include:
* Capacity Increase: Expansion of production capacity at Herøya to up to 1 Gigawatt.
* EU Backing: Grants from the EU Innovation Fund of up to 135 million euros, which could cover as much as 60% of relevant investment and operational costs.
* Initial Investment: Approximately 300 million NOK before accounting for the grants.
* Commercial Launch: Planned market introduction in the first half of 2026.
* Volume Ramp-Up: Significant delivery volumes are anticipated from 2027 onwards.

This move follows Nel's decision early in 2025 to scale back production of its older atmospheric alkaline electrolyzers due to challenging market conditions. The company is now consolidating its efforts on the pressurized alkaline platform, which is designed to offer higher efficiency and lower manufacturing costs per kilogram of hydrogen.

Outlook and Key Upcoming Catalyst

The first half of 2026 will serve as a crucial operational test for Nel. The strategic shift is a direct response to intense price competition, notably from Chinese manufacturers who have captured market share. By leveraging existing infrastructure at Herøya and substantial EU funding, the company aims to reduce unit costs sufficiently to regain competitiveness in large-scale industrial projects across Europe and North America.

The company also maintains support from major shareholder Samsung E&A, which entered during a capital raise in March 2025. The current average analyst price target sits near 2.28 NOK, roughly in line with recent trading levels.

A significant upcoming event is the next quarterly report scheduled for February 26, 2026. Markets will likely scrutinize new order intake and concrete contract signings for the new 1-GW capacity. The key factor for equity valuation will be Nel's ability to meet the planned production start in H1 2026, thereby laying the groundwork for the expected volume ramp-up beginning in 2027.