Nel ASA: AlphaValue Trims Rating to Add as Order Momentum Outpaces Revenue

Nel ASA drew a more guarded verdict from AlphaValue/Baader Europe on Friday, which cut its recommendation from "Buy" to "Add" and lowered its price target. The downgrade lands even though order intake has surged, underscoring the split investors now have to navigate: bookings point to opportunity, while the revenue line remains under heavy pressure.

Bookings and Billings Move in Opposite Directions

The third-quarter 2026 figures, released just over a week ago, lay out that contrast plainly. Revenue from customer contracts fell 63% year on year to NOK 112 million.

Fresh orders cannot close that gap overnight. They relate to future business and therefore offer no proof that a recovery has already taken hold — a timing distinction that matters when reading the numbers. Order intake climbed 339% to NOK 253 million, and the order backlog grew 34% to NOK 1,314 million.

That improves the starting base for future revenue. Whether it produces a lasting top-line turnaround cannot be inferred from order intake alone. The AlphaValue/Baader Europe downgrade sits alongside these conflicting signals; no specific rationale is drawn from it.

PEM Stands Out Against the Group Trend

Within the PEM segment, revenue rose 65% to NOK 89 million, moving against the declining group total. Orders there are growing too — more than an uncommitted project outlook, yet still to be separated from eventual delivery and execution.

PEM order intake jumped 473% to NOK 245 million. On 13 October, Nel Hydrogen US separately reported an order worth roughly US$12 million. The buyer is an unnamed US-based global technology group, and the booking covers several containerized PEM electrolysers from the MC series plus associated services. Delivery is expected in 2027, giving a concrete timing marker but no evidence of a near-term revenue lift.

A Letter of Intent Is Not an Order

Distinct from that is the letter of intent signed with Rheinmetall just over a week ago. The two companies will examine decentralized production of synthetic fuels for defense applications and critical infrastructure, combining Nel's electrolyser technology with Rheinmetall's Giga-PtX concept. The arrangement is non-binding and must therefore be weighted differently from the reported US order.

For investors, a clear hierarchy emerges: revenue documents business already achieved, orders open up future revenue chances, and the cooperation describes a possible additional avenue. A durable recovery would ultimately have to show up in the top line.

What Would Confirm the Turnaround

A convincing shift hinges on whether stronger bookings can eventually generate enough revenue to contain losses. Shareholders face a choice — to give more weight to order intake, or to demand an improvement in earnings first. Orders argue for additional business opportunities; on their own they do not yet prove an economic rebound.

The loss figures reported alongside the quarter show how far Nel is from an earnings turnaround. EBITDA came in at NOK -93 million for the third quarter of 2026, with a net loss of NOK -141 million. A growing backlog cannot dissolve that burden immediately: it signals contracted business but replaces neither execution nor the revenue that follows.

The future EBITDA trajectory is therefore the key checkpoint — it would need to show that extra business genuinely improves the operating loss position. The positive scenario starts with executing orders already won; if that succeeds and operating results improve at the same time, higher order intake could become the launch point of a recovery. Investors would then no longer be betting on bookings as a mere harbinger but could judge their contribution to the business.

The negative scenario would be a sustained decoupling of orders and earnings. Additional revenue alone would not be a sufficient signal if operating losses failed to shrink. The delivery expected in 2027 from the US order is the concrete time anchor; progress on its execution would be a test, and a more binding agreement with Rheinmetall a further possible catalyst. Until then, the distinction is clear: orders create potential, and only better results would confirm the loss turnaround.