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December 27th, 2022 | 06:07 CET

Excitement at BASF, Nel ASA, Meta Materials: Shares for 2023

  • metamaterials
  • Innovations
  • Digitization
Photo credits: BASF SE

After a difficult 2022, investors are looking ahead to the coming year. In 2023, it will be important to pick the right stocks again because there will be winners - despite the war in Ukraine, high inflation and rising interest rates. At the same time, the price rockets of the old year are rarely also those of the new year. As is well known, BASF shares have struggled in 2022. If energy prices continue to ease, the high dividend yield, among other things, will entice investors. Also, there is news in the electromobility megamarket. There is no question that hydrogen offers huge opportunities worldwide. But companies like Nel and Plug Power must finally wake up faster and reduce losses. At Nel ASA, a sell recommendation weighed on the share price at the end of the year. Hot stock Meta Materials has already multiplied sales in the first 3 quarters of 2022, and the chances are good that the positive trend will continue in 2023. Then the Meta Materials share should also take off.

time to read: 4 minutes | Author: Fabian Lorenz
ISIN: BASF SE NA O.N. | DE000BASF111 , NEL ASA NK-_20 | NO0010081235 , Meta Materials Inc. | US59134N1046

Table of contents:

    Meta Materials: Successful commercialization of a future technology

    Young high-tech stocks did not have it easy in 2022. Meta Materials was no exception. The Canadian company's shares, which are traded on the Nasdaq, have lost a little more than half their value this year. Yet the Company is not only researching high-performance functional materials and nanocomposites. In 2022, the Canadians have also begun commercialization. As a result, sales rose 388% to nearly CAD 9 million in the first nine months. If growth continues in 2023 and the loss is reduced, higher share prices are also possible again. Meta Materials wants to create the basis for this right away in January at the CES tech trade fair in Las Vegas. Among other things, the Company will present its transparent EMI shielding film NANOWEB® there. The transparent conductive film improves protection in the performance of numerous devices. For example, it can protect sensors for self-driving cars or even 5G devices from environmental influences. The Company has already received an important reference order for the protection of banknotes this year.

    "It is an honor for our innovation to be awarded by the CTA. Our roll-to-roll NANOWEB® line is ready to start production in 2023 for the typical rectangular dimensions of microwave oven doors," said Meta Materials CEO George Palikaras. "In Q3/2022, we completed the 5G reflective foil line optimization, with production meeting and exceeding customer specifications. We look forward to commercializing NANOWEB® for more and more products as we expand capacity."

    The Company sees a very significant field for the use of its innovative products in the area of electromobility. To this end, the Canadians have most recently developed two new materials to improve the performance, safety and sustainability of Li-ion batteries used in electric vehicles and other applications. NPORE® nanocomposite ceramic separators are said to reduce the fire hazard of batteries significantly. And metal/polymer composite current collectors made with patented PLASMAfusion® technology are said to reduce weight by 80% compared to solid copper foils. The advantages: Extended range and improved sustainability by reducing copper content.

    BASF: Benefits from collapsing gas price

    When it comes to batteries for tomorrow's mobility, BASF also wants to get more involved. For example, it wants to contribute to making recharging possible within 15 minutes as early as 2025. According to the Ludwigshafen-based chemical company, it is also possible to double the real-world range of a mid-size car from 300 to 600 km. In order to achieve this, BASF is researching innovative cathode materials, among other things. These are of central importance for the performance, cost, reliability and sustainability of modern batteries. Every day, more than 100 million data points are generated and evaluated within the tests. Machine learning will help predict and analyze material properties and accelerate our research.

    In addition to cathode materials for lithium-ion batteries - which BASF is already successfully selling - BASF researchers are working on materials for next-generation batteries, such as solid-state batteries. These have advantages over conventional batteries with liquid electrolytes due to their higher thermal stability. For automakers, this type of battery could offer advantages in terms of safety and battery volume. In addition, this battery type also allows the use of high-energy content materials such as lithium anodes or high-voltage cathodes, which is much more difficult to achieve in liquid electrolyte cells.

    Nel is automating more and more of its production. Source: Nel ASA

    Nel: Sell recommendation burdened

    Alongside electromobility, hydrogen is also seen as an essential part of the energy transition. But hydrogen stocks such as Nel, Plug-Power, ITM Power and Powercells were among the losers in 2022. They all failed to meet high expectations for company growth. Often, losses grew faster than sales. This must change in 2023. At least Nel's Everfuel investment was able to report the start of H2 production in Fredericia, Denmark, shortly before Christmas. The electrolyzer capacity of 20 MW in 2023 is to be expanded step by step. In a few years, the Company considers 330 MW possible. It has already received funding for the next 100 MW. While Everfuel is the operator of the plants, Nel usually receives the orders for the respective construction of the hydrogen production plants.

    Analysts have differing views about the chances of the Nel share in the coming year. Most recently, Jefferies confirmed its buy recommendation and raised the price target slightly from NOK 19 to NOK 20. Due to the latest order in the Fueling division, the analysts' sales estimates for this division are already 95% hedged for 2023 and 45% for 2024. Should there be further orders, this could lead to an increase in estimates - also for the entire company. SEB is more cautious. Their analysts have downgraded the Nel share to "sell" with a price target of NOK 10. Currently, the share is trading at around NOK 13.45. The high for the year was marked in March at NOK 18.

    2023 will be exciting - that much is certain. Should the war in Ukraine ease, this could have a massive impact on BASF. Operationally, things are going well for the Company, and the dividend yield is high. There are also good reasons for higher prices for Meta Materials in 2023, provided that the commercialization of innovative technologies continues. There may be new order announcements during or after CES. Nel and the other hydrogen companies have lost much confidence in the current year. In 2023, the wheat will finally be separated from the chaff.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Fabian Lorenz

    For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.

    About the author

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