Nel ASA: A Hydrogen Order Boom That Can't Outrun the Balance Sheet

JPMorgan trims Nel ASA price target to NOK 1.80 amid surging orders but falling revenue, negative EBITDA, and a NOK 600M annual cash drawdown.

The market's verdict on Nel ASA has been written in increments — a target-price cut here, a cash-burn disclosure there — and the cumulative effect is a stock trading barely above its floor. JPMorgan's decision to trim its price objective on the Norwegian hydrogen equipment maker from NOK 2.90 to NOK 1.80, while keeping a "Neutral" stance, lands at a moment when the company's operational momentum and its financial staying power are pulling in opposite directions.

The tension is visible in the share price itself. On the German exchange, the stock changed hands at €0.1946 on Thursday, down 1.62 percent on the day, though the primary article reports a slightly higher quote of €0.1986 with a modest 0.40 percent gain — a discrepancy reflecting intraday volatility. Either way, the distance from the 52-week high of €0.3655, set on May 25, is a stark 47 percent. The relative strength index of 38.9 points to weak momentum without flashing an oversold signal, while the shares sit 14.73 percent above their 52-week low of €0.1731, reached on February 26, 2026, and remain well below the 50-day average of €0.2241.

The Order Book Tells One Story, the P&L Another

The numbers Nel ASA published on July 15 for the second quarter of 2026 capture the contradiction at the heart of the investment case. Incoming orders surged 224 percent year over year to NOK 230 million, up from NOK 71 million in the same period of 2025, with the PEM segment accounting for 96 percent of that growth. Revenue from customer contracts, however, fell 12 percent to NOK 153 million, and total revenue came in at NOK 182 million against NOK 215 million a year earlier.

The bottom line remains firmly in the red. EBITDA landed at negative NOK 155 million, a figure that includes a one-off charge of NOK 70 million tied to a settlement reached in June with Iwatani Corporation of America. Strip that out, and the operating loss would have been smaller — but still negative. That combination of a swelling pipeline and shrinking margins is precisely what keeps JPMorgan cautious.

Cash Reserves Under Pressure

The balance sheet tells a similarly sobering story. Cash and cash equivalents stood at NOK 1.328 billion as of June 30, 2026, down from NOK 1.928 billion a year earlier — a roughly NOK 600 million drawdown in twelve months driven by ongoing losses and the legal settlement. The remaining liquidity still provides breathing room, but the trajectory is unmistakable.

Adding to the uncertainty is a leadership transition. CEO Håkon Volldal announced his resignation on June 15 to pursue another opportunity and is serving out a six-month notice period while the board searches for a successor. A change at the top during a period of weak financials and depleted reserves rarely calms investor nerves.

Technology Bets and Upcoming Catalysts

On the product side, Nel ASA is pinning its hopes on the "PA-Series," a next-generation pressurized alkaline electrolyzer platform unveiled in May. The company targets system cost reductions of 40 to 60 percent and aims to reach 500 megawatts of production capacity by the end of 2026. The secondary article adds a specific ambition: system costs below $1,450 per kilowatt for a 25-megawatt installation. Whether this platform can convert order momentum into profitable growth is a question that will take several quarters to answer.

Two dates stand out for investors. The European Commission is expected to announce results from its "HORIZON-JU-CLEANH2-2026" funding program in early August, with Nel ASA and its partners among the 170 applicants vying for grants in green hydrogen production and storage — a potential tailwind for the order pipeline. Then on October 21, the company reports third-quarter results, which should reveal whether the PEM order surge is translating into revenue.

Meanwhile, Samsung E&A remains the second-largest shareholder with a 9.09 percent stake, or 167,155,785 shares. For now, Nel ASA's stock is caught between the optimism of a growing order book and the reality of a shrinking balance sheet — with a leadership vacuum adding an extra layer of uncertainty to the equation.