Nel ASA’s Critical Juncture: A 2026 Survival Test

Nel ASA NO0010081235

Shares of Norwegian hydrogen technology firm Nel ASA continue to languish near all-time lows, presenting investors with a stark dilemma as a pivotal 2026 deadline approaches. The company is staking its future on a major technological bet while grappling with a severe contraction in its order backlog.

Trading within a narrow band around NOK 2.26, the stock shows minimal volatility and remains a staggering 93% below its 2021 hype-driven peak. Over the past twelve months, it has shed approximately 20% of its value, starkly underperforming the broader market advance. A particularly telling metric is the price-to-book ratio of 0.87, indicating the market currently values the enterprise below its stated net asset value—a clear signal of deep-seated investor skepticism regarding its near-term prospects.

Confronted with operational headwinds, Nel's management is pursuing a forward-looking escape strategy. In December, the board approved the industrialization of its "Next-Generation Pressurized Alkaline" platform. Backed by commitments of up to €135 million from the EU Innovation Fund, this technology aims to significantly reduce the cost of producing hydrogen.

The company has outlined plans to invest roughly NOK 300 million for an initial production capacity of one gigawatt. A commercial launch is scheduled for the first half of 2026, with industrial-scale deliveries expected to commence from 2027. However, this strategic announcement provided only a fleeting boost to the share price, failing to generate sustained market enthusiasm.

Core Business Under Severe Pressure

The primary driver behind the prevailing negative sentiment is a dramatic decline in the firm's order book. Year-over-year, it has nearly halved to NOK 984 million. Such a severe contraction drastically limits revenue visibility and has severely shaken the confidence of institutional investors.

The operational consequences are already materializing. Early in 2025, Nel was forced to reduce its workforce by about 20% and temporarily halt production of certain electrolyzers at its Herøya plant. Management has even resorted to reclaiming equipment from projects where customers have fallen behind on payments, underscoring the acute financial strain.

Glimmers of Hope Amid Prevailing Doubt

Despite the challenging environment, Nel secured a notable win in November 2025: an order exceeding $50 million for PEM electrolyzers, marking the second-largest deal in the company's history. Furthermore, the commissioning of a hydrogen facility by Samsung E&A could potentially unlock new distribution channels.

Market experts, however, remain largely unconvinced. The prevailing analyst consensus leans toward "Sell" or "Underweight" ratings, with an average price target of NOK 2.22. The range of estimates extends as low as NOK 1.20, highlighting profound uncertainty about management's ability to execute its plans effectively.

The critical question is whether new strategies and partnerships can offset the evaporation of legacy orders. A key date for clarification is February 26, 2026, when Nel is set to report its fourth-quarter 2025 results. This disclosure will provide crucial insights into the progress of its industrialization efforts and the tangible state of its earnings trajectory. For shareholders, 2026 represents a definitive year of reckoning.