Nel ASA Shares at a Critical Juncture

Investors in Oslo-listed Nel ASA are facing a tense period as the company's stock hovers near a critical support level. Trading at 2.39 NOK, the share price is dangerously close to the lower end of its 52-week range. The market sentiment is divided, weighing recent operational improvements against a severe contraction in new orders. The coming sessions could determine whether the current price floor holds or gives way.

The latest quarterly report presents a mixed fundamental picture. While customer contract revenue fell approximately 17% year-over-year to 303 million NOK, management demonstrated progress on efficiency. The EBITDA loss narrowed significantly to -37 million NOK, a marked improvement from the 90 million NOK loss in the comparable prior-year period. Cost control measures are taking effect, yet top-line growth has stalled.

For market participants, however, the state of the order pipeline is causing greater concern. Key figures reveal substantial pressure:

• Order Intake: A dramatic 64% decline to a meager 57 million NOK.
• Order Backlog: Fell 47% to 984 million NOK, dropping below the psychologically significant one-billion mark.
• Cash Position: Remains a short-term buffer at roughly 1.8 billion NOK.

GreenH Agreement Provides a Glimmer of Hope

Amid this pronounced slowdown in new business, one November announcement offered a brief respite. The finalized agreement with GreenH AS currently serves as a key sentiment prop. Nel will supply electrolyser equipment for two hydrogen-based projects in Kristiansund and Slagentangen, representing a total capacity of around 20 MW.

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

CEO Håkon Volldal highlighted the partnership's importance for regional infrastructure development. For shareholders, the deal is primarily a necessary, though modest, bolster to a shrinking order backlog. The critical question remains whether this contract can signal a turning point.

Market Strategists Foresee Further Declines

Despite the operational strides, analysts maintain a cautious stance. The consensus recommendation leans heavily toward "Sell," with an average price target of 2.23 NOK implying a further 6-7% downside from current levels. The range of forecasts is exceptionally wide: while the most optimistic analysts see a path to 4.20 NOK, the most bearish warn of a potential drop to 1.20 NOK.

The core issue persists—a stark lack of momentum in securing new orders. The 1.8 billion NOK liquidity position buys the company time but does not, in itself, justify a higher valuation. The shares are currently battling for support at the 2.39 NOK level. A breach here could trigger a swift move toward the 52-week low of 1.95 NOK. Without a substantial recovery in the order intake, bullish investors are likely to remain on the defensive.