Nel ASA Wins $20 Million in Submarine Contracts as SB1 Markets Cuts Target to NOK 0.30

Nel ASA won ~USD 20M in Collins Aerospace orders, but SB1 Markets cut its target to NOK 0.30 and kept a sell rating ahead of Q3 2026 results.

Nel ASA is heading into its third-quarter 2026 report with a split story: a fresh defense-sector win on one side, and mounting analyst skepticism about its path to profitability on the other. The Norwegian hydrogen specialist's shares last changed hands at EUR 0.1902, with the stock sitting 48% below its 52-week high.

Collins Aerospace Orders Fill the Book, Not the Bank Account

Through its US subsidiary Nel Hydrogen US, the company secured contracts from American aerospace giant Collins Aerospace roughly a week ago. The orders carry a total volume of about USD 20 million and cover PEM electrolyser stacks used to generate oxygen for life-support systems aboard submarines. The technology serves naval programs in the United States, the United Kingdom and France.

Nel is booking these volumes in the current third quarter. The bulk of the deliveries, however, will not ship until 2027 and 2028, meaning the actual cash from this flagship project reaches the company only after a considerable delay. For near-term earnings power, the military contracts offer little relief.

SB1 Markets Slashes Its Target and Sticks With a Sell

Against that order-book momentum, caution dominates on the capital markets. On 29 September, Norwegian brokerage SB1 Markets lowered its price target on the stock from NOK 0.50 to NOK 0.30 while reaffirming its sell recommendation. Analyst Andreas Skeisvoll Grimsmo pointed to persistently difficult conditions in the global electrolyser market, citing a continuing oversupply of production capacity and Nel's low single-digit worldwide market share.

In the analyst's view, the company lacks a reliable route to operating profitability. Over the longer term, SB1 Markets expects Nel to require another round of fresh equity capital — a prospect of potential dilution that has visibly dampened investor confidence. Media reports indicate the brokerage subsequently trimmed its operating earnings forecasts as well.

Those downward revisions reflect growing disillusionment with the sluggish ramp-up of the hydrogen economy. High fixed costs and subdued order intake weigh on the entire sector.

What Investors Will Scrutinize in the Quarterly Report

Attention now turns to Nel's upcoming interim report, which should offer concrete evidence of how the company's financial footing is actually developing. Market participants are likely to focus on whether the operating cash burn is slowing and how margins are trending, alongside management's outlook for future capacity utilization.

Sentiment in the market has been muted of late. The stock closed yesterday at EUR 0.1906, a daily move of -1.6%, and remains far below its earlier highs of the year.

Whether Nel can durably rebuild trust will hinge above all on its operational trajectory and how it deploys its capital going forward.