On Tuesday, RBC Capital adjusted its stance on NEL ASA (NEL:NO), a company specializing in hydrogen technology. The firm downgraded the stock from Outperform to Sector Perform, while significantly reducing the price target to NOK4.00, a sharp decrease from the previous NOK12.00.
The downgrade reflects RBC Capital's concerns about the potential challenges NEL ASA may face in the coming years. Despite acknowledging NEL's state-of-the-art facilities and a solid five-year commercial track record, which showcases the company's strong execution and marketing capabilities in the green hydrogen space, the analyst pointed to increased risks.
Specifically, looking ahead to 2025, RBC Capital anticipates heightened revenue growth risk for NEL ASA. The analyst cited continued negative sentiment surrounding the stock, which is partly attributed to the company's significant exposure to the US market.
The revised price target of NOK4.00, down from NOK12.00, represents a recalibration of expectations for the company's financial performance in the near future. This new target is indicative of the analyst's revised outlook on the stock's potential to generate returns for investors.
NEL ASA is recognized for its involvement in the green hydrogen sector, an area of growing importance as the world shifts towards sustainable energy sources. The company's performance and investor sentiment will continue to be influenced by market conditions and its ability to navigate the competitive landscape in the hydrogen industry.
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