NEL ASA shares target lifted as Citi highlights recent partnerships

Published 09/07/2024, 11:32
NEL ASA shares target lifted as Citi highlights recent partnerships

On Tuesday, Citi updated its stance on NEL ASA (NEL:NO) shares, a hydrogen technology company, by raising its price target to NOK6.00 from the previous NOK4.61. Despite the increase, the firm maintained its Neutral rating on the company's stock. The adjustment reflects recent developments concerning the company's licenses and partnerships.

The price target revision follows NEL ASA's announcements about a capacity reservation agreement with Hy Stor for a project exceeding 1 GW in the United States and a licensing agreement with Reliance. These developments have contributed to the shares' performance, which, despite a decline since early June, have seen a significant rise since late April.

The analyst noted that the Hy Stor project's advancement hinges on securing additional support from the Department of Energy. Similarly, the success of the partnership with Reliance is contingent upon Reliance's commitment to expanding its hydrogen operations.

Citi's group revenue forecast for NEL ASA has been reduced due to the spin-off of the company's Fueling business, which was deemed lower quality. However, within the Electrolyser segment, revenue forecasts have been increased, aligning more closely with the consensus, particularly due to the potential in the U.S. market.

Consequently, the price target has been raised while retaining the Neutral/High Risk rating, acknowledging the uncertainties surrounding the timing and scale of the aforementioned projects.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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