The share of NEL ASA, a Norwegian specialist in electrolyzers for hydrogen production, recorded significant price losses this week. On Thursday, the price fell by 5.16 percent to 2.924 Norwegian kroner (NOK), dropping below the psychologically important mark of 3 NOK for the first time in a long time. Already on Wednesday, after a decline of 10.5 percent, the stock had been able to defend this mark only narrowly.

The trigger for the sell-off was an analysis by Kepler Cheuvreux, which resumed its coverage of the NEL stock and rated it with a pessimistic "Reduce" rating and a price target of 2.50 NOK. This corresponds to a discount of approximately 14 percent compared to the current price. The analysts justified their skeptical assessment with a potential capital increase in the near future.

Without a rapid increase in orders, a future capital increase seems likely, despite a cash balance of 1.9 billion NOK as of Q3 2024," the analysis states. A capital increase at the current price level could lead to a significant dilution of existing shareholders' stakes.

Kepler Cheuvreux also criticized the valuation of the NEL share. According to the analysis, the stock is traded at a premium compared to competitors, which is not justified given the existing risks. This assessment hits NEL in an already difficult market environment characterized by a persistently weak industry sentiment.

After the significant losses of recent days, the stock stabilized on Friday. It rose by 1.27 percent on the Oslo Stock Exchange to 2.961 NOK, thereby ending the losing streak. Nevertheless, uncertainty among investors remains high, especially considering the prospect of a potential capital increase.