Nel ASA Shares Signal Potential Rebound After Prolonged Slump

Nel ASA NO0010081235

A significant surge in its share price has marked Nel ASA's entry into 2026, fueling speculation that the Norwegian hydrogen specialist's extended downturn may be concluding. This upward movement aligns with a broader sector recovery, though Nel distinguishes itself through a comparatively stronger balance sheet and tangible technological advancements. The critical question for investors is whether this represents the beginning of a sustained rally or merely a temporary market correction.

Despite the positive price action, a review of operational metrics confirms the journey ahead remains challenging. The company's third-quarter 2025 report indicated a contraction in contract revenues, which fell to 303 million Norwegian krone (NOK).

Market observers, however, are highlighting the firm's stringent cost management as a key strength. These efficiency measures are yielding results: the EBITDA loss showed a substantial year-on-year improvement, narrowing from -90 million NOK to -37 million NOK. Furthermore, Nel secured several crucial project orders towards the end of the year, including agreements with HyFuel and H2 Energy, helping to offset the softer Q3 performance.

A Sector-Wide Shift in Sentiment

The positive momentum for Nel ASA at the start of the year was part of a wider industry trend. Peers including Plug Power and thyssenkrupp nucera also posted double-digit share price gains. For long-suffering investors in the hydrogen space—many of whom have endured significant losses since the sector's peak hype in 2021—this provides a welcome respite. Nel's own shares had declined approximately 14% over the preceding year, notably underperforming the broader Norwegian market.

Analysts point to several concrete developments underpinning the renewed optimism:
* EU Backing: The award of up to 135 million euros in support from the EU Innovation Fund for its new pressurized alkaline technology.
* Production Scale-Up: A finalized investment decision in December 2025 to expand manufacturing capacity at Herøya to 1 gigawatt (GW).
* Product Launch: The scheduled commercial rollout of the new technology platform in the first half of 2026.

Compared to its financially strained US competitor Plug Power, Nel enters the new year from a more stable fundamental position, underscored by cash reserves of 1.76 billion NOK as of September 30, 2025.

The Defining Year Ahead

The consensus price target among analysts currently sits around 2.28 NOK, mirroring recent trading levels. The wide dispersion of individual estimates, however, reflects the persistent uncertainty clouding the sector. Under CEO Håkon Volldal's strategy, the focus is on achieving cost reductions through modular containerized designs, aiming to make hydrogen competitive even without extensive subsidies.

The pivotal catalyst for a lasting re-rating will be the successful commercial introduction of the "Next Generation Pressurized Alkaline" platform in the coming months. A seamless transition from development to scalable manufacturing could fundamentally restore market confidence. Strategic support is provided by major shareholder Samsung E&A, which came on board following a capital increase in March 2025.

The upcoming quarterly report on February 26, 2026, will be closely watched for evidence that order intake is meeting expectations. While Nel is often viewed as a more defensive pick within the volatile hydrogen sector, its long-term trajectory will ultimately be determined by the successful industrialization and market adoption of its new technology.