Nel ASA Shares Approach a Critical Juncture

Trading near historic lows, Nel ASA's stock reflects a company under intense market scrutiny. Since its 2021 peak, the share price has collapsed, leaving many analysts questioning whether the business model can prove itself in the coming year. The market now values the firm below its book value, signaling profound skepticism about its future earnings potential.

• Share price around NOK 2.28, approximately 93% below the 2021 high.
• Market capitalization of roughly NOK 4.19 billion.
• Price-to-book ratio stands at 0.87.
• Order backlog declined 47% to NOK 984 million.
• 12-month performance is approximately -19%.

A 47% contraction in the order book to NOK 984 million represents a central concern, particularly for institutional investors. The significantly reduced visibility into future revenue is dampening the willingness of larger market participants to establish new positions.

Operational challenges compound the issue. In January 2025, Nel reduced its workforce by about 20% and temporarily halted production of atmospheric alkaline electrolyzers at its Herøya facility. Furthermore, the company has begun reclaiming equipment from projects where customers have fallen behind on payments. These steps underscore the pressure on the existing project portfolio.

Valuation and Trading Pressure Persist

The equity currently fluctuates between NOK 2.23 and NOK 2.29, hovering just above its 52-week low of NOK 1.95. Market capitalization has shrunk considerably from the peak of hydrogen euphoria in 2021.

A price-to-book ratio of 0.87 indicates the market is valuing Nel below its stated equity. This suggests investors are taking a skeptical view of both the balance sheet assets and the firm's future earning power. The 12-month performance of around -19% reinforces the persistent downward pressure.

Trading activity remains solid, averaging about 4.1 million shares per day, though it no longer matches the frenzy seen previously.

Herøya: A Strategic Bet on Next-Generation Technology

In a key strategic move, Nel's board approved the final investment decision in December 2025 to industrialize its Next-Generation Pressurized Alkaline platform at Herøya. The project's key parameters are:

• Total investment: approximately NOK 300 million.
• Initial capacity: 1 Gigawatt (GW).
• EU Innovation Fund: grant support of up to EUR 135 million.
• Scaling potential: expansion to up to 4 GW.
• Commercial launch: first half of 2026.
• Industrial-scale deliveries: expected from 2027.

This modular, container-based platform is designed to significantly reduce hydrogen production costs. While the announcement prompted a brief share price recovery, the rally proved short-lived. The market appears to be granting only limited credibility to the project's long-term potential so far.

Should investors sell immediately? Or is it worth buying Nel ASA?

Glimmers of Hope in Project Wins

Despite a challenging environment, Nel has reported some positive developments. In November 2025, the company secured a major PEM electrolyzer order worth over USD 50 million for the Norwegian HyFuel and Kaupanes hydrogen projects. This marks the second-largest contract in the company's history and its single largest PEM award.

Additionally, Samsung E&A has commissioned its CompassH2 hydrogen plant utilizing Nel's alkaline technology. This cooperation could unlock further sales opportunities, as reference projects are a critical factor for winning new bids in the hydrogen sector.

Analyst Sentiment Remains Cautious

The prevailing mood among research analysts continues to be one of caution. Ratings span from "Underperform" to "Sell," with the average price target hovering near NOK 2.22—barely above the current trading level.

The wide dispersion in price targets, ranging from NOK 1.20 to NOK 4.20, is notable. It highlights the significant uncertainty regarding both the broader hydrogen market's development and the execution of Nel's corporate strategy.

Current analyst views include:
- Citi: "Neutral" rating with a NOK 2.70 price target.
- Kepler Cheuvreux: "Reduce" rating with a NOK 1.90 price target.
- Jefferies: "Hold" rating with a NOK 2.20 price target.

Collectively, the data paints a picture of a skeptical sell-side community adopting a wait-and-see approach.

Pivotal Quarters Ahead of the Q4 Report

The coming months will be decisive in revealing whether the new Herøya program, the project pipeline, and strategic partnerships can offset the sharp decline in the order backlog. A comprehensive interim assessment will be provided with the Q4 2025 report, scheduled for release on February 26, 2026. This report is expected to include detailed updates on industrialization progress, revenue, and earnings developments.