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March 6th, 2024 | 11:30 CET

Hydrogen news: Nel shares "Sell", Thyssenkrupp Nucera "Buy", and First Hydrogen convinces customers

  • Hydrogen
  • fuelcell
  • renewableenergies
Photo credits: Thyssenkrupp Nucera

Are Nel shares at risk of another price slide? The Norwegians failed to impress with their figures for the fourth quarter and the full year 2023. Incoming orders, in particular, are a cause for concern. Analysts see further downside potential for the share, but there are also optimists. In contrast, the hydrogen newcomer First Hydrogen, which specializes in commercial vehicles, is convincing. In the UK, there was no loss of range even during use in the cold season. Owners of Tesla, Volkswagen and the like can only dream of this. If concrete orders follow, the share should be able to take off. Analysts see potential for Thyssekrupp Nucera shares. The development in the first quarter was convincing. However, investors should also scrutinize the developments in the German hydrogen hopeful.

time to read: 3 minutes | Author: Fabian Lorenz
ISIN: NEL ASA NK-_20 | NO0010081235 , THYSSENKRUPP NUCERA AG & CO KGAA | DE000NCA0001 , First Hydrogen Corp. | CA32057N1042

Table of contents:


    First Hydrogen: Vehicle impresses, even in winter

    This year holds exciting developments for First Hydrogen. The Company specializes in the development of hydrogen-powered commercial vehicles. The vehicles are already being tested in the UK by potential customers, where they are proving to be convincing, especially in comparison with electric drives. A large vehicle assembly plant is to be built in Canada to supply the markets in Europe and North America. Customers could soon include Wales & West Utilities (WWU). The British gas network operator has tested the hydrogen-powered fuel cell vehicle (FCEV) from First Hydrogen in everyday use and is impressed. Notably, during the practical test, temperatures dropped to as low as 2 degrees, yet there was no loss of range. This is crucial for fleet operators and a decisive advantage for hydrogen in competition with electric drives. When heating and air conditioning are used, electrically powered commercial vehicles experience a significant loss of range. In earlier test runs, the FCEV from First Hydrogen achieved a peak range of 630 km.

    Overall, the test at Wales & West Utilities has been convincing. WWU manager Stephen Offley said: "We are impressed with the performance of First Hydrogen's FCEV, and the tests give us a real insight into the benefits and potential use of hydrogen vehicles in our fleet. A reliable and repeatable range is important for fleet managers so we can plan daily operations without being restricted by colder weather and allow more time for charging. February is one of the coldest months in South Wales and one of the months with the most emergency deployments for WWU. However, the cooler temperatures have not impacted the vehicle's ability, and our technicians have been able to respond to all required deployments."

    Despite the weak industry environment, the First Hydrogen share has been trading between EUR 1 and EUR 1.20 for several months. After successful tests, concrete orders should follow, and then the share should also take off. With a market capitalization of less than CAD 100 million, the Company does not appear expensive.

    Nel: Is the price slide not over yet?

    In contrast, Nel still carries a market capitalization of around NOK 9 billion on the stock market. Although the Norwegians generate significantly more turnover than First Hydrogen, they have yet to demonstrate a profitable business model.

    **Nevertheless, Nel reduced its EBITDA loss from NOK -216 million to NOK -106 million in the fourth quarter of 2023. However, concerns arise regarding the order intake. At the end of the year, Nel had an order backlog of NOK 2.5 billion, compared to NOK 2.6 billion at the end of 2022. The issue becomes more pronounced when looking at the fourth quarter, where orders with a volume of NOK 183 million were recorded. In the last quarter of 2022, the figure was NOK 982 million. A positive trend looks different.

    Analysts share this concern. From UBS's perspective, Nel urgently needs to secure new orders to achieve its sales targets in 2025. The analysts rate Nel as "Sell", with a price target of NOK 3.70. The share is currently trading at NOK 4.68.

    Berenberg is more optimistic. They rate Nel as "Buy" with a price target of NOK 11. However, the Berenberg analysts also highlight the order backlog. Some substantial orders are needed to regain investor confidence. Berenberg currently favours Thyssenkrupp Nucera.

    Thyssenkrupp Nucera: Q1 figures convince analysts

    The German hydrogen hopeful is currently performing noticeably better than the pioneers Nel and Plug Power. However, the start-up costs in the hydrogen segment are also making themselves felt at Thyssenkrupp Nucera. In the first quarter of the 2023/24 financial year, sales rose by 35% to EUR 208.3 million. Growth was once again driven by the alkaline water electrolysis (AWE) segment for the production of green hydrogen, with an increase of 73% to EUR 120.6 million. Incoming orders in AWE increased by 34% to EUR 109.1 million. The earnings trend shows that the AWE segment is not yet profitable. Group EBITDA fell from EUR 11.9 million to just EUR 0.4 million. Nevertheless, the free cash flow is still positive at EUR 0.5 million. Investors should keep a close eye on incoming orders in the coming quarters.

    The quarterly figures were well received by analysts. Berenberg has confirmed its "Buy" recommendation for Thyssenkrupp Nucera, with a target price of EUR 22. The share is currently trading below EUR 15. Deutsche Bank was also satisfied with Thyssenkrupp Nucera's start to the financial year. The analysts' target price is as high as EUR 29.


    Hydrogen shares are not for the faint-hearted. The technology is crucial for the future, but the question remains: In which area exactly and which company will prevail? A great deal of trust has been lost in industry giants Plug Power and Nel. Newcomers like First Hydrogen and Thyssenkrupp Nucera appear promising, impressing with positive newsflow and the potential to bring a breath of fresh air into the portfolio.


    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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