15. September 2021 | 14:23 CET
Nel ASA, Enapter, Plug Power, FuelCell Energy - It is time to go all out!
Hydrogen is not only a climate-friendly means of propulsion for automobiles and heavy-duty transport. Large industries such as chemicals and steel can use hydrogen technology to reduce their consumption of natural gas. There are costs involved when converting to hydrogen, most of which are only feasible with political support. The German government's national hydrogen strategy fits in well here. But medium-sized industries, especially energy-intensive sectors, could also become much more environmentally friendly with hydrogen-based technologies. Which stocks are well-positioned here?
time to read:
ISIN: NEL ASA NK-_20 | NO0010081235 , ENAPTER AG INH O.N. | DE000A255G02 , PLUG POWER INC. DL-_01 | US72919P2020 , FUELCELL ENERGY DL-_0001 | US35952H6018
"[...] We are committed to stay as the number one Canadian and global leader in the Hydrogen-On-Demand diesel technology [...]" Jim Payne, CEO, dynaCERT Inc.
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Nel ASA - This does not look good
Nel ASA has resumed its downtrend, with the January high of EUR 3.40 receding into the distance. With a price of EUR 1.35, the chart picture is now clouding again, and the sell-off threatens to continue. After the papers of Nel marked a new annual low at NOK 13 in mid-August, a slight recovery set in and the price trend formed a reverse shoulder-head-shoulder (SHS) formation. However, this was not confirmed by a breakout above the NOK 15.28 or EUR 1.50 level. The price bounced off the trend line to the downside.
Nevertheless, the order book of the Norwegian hydrogen group continues to fill up. This time, the subsidiary Nel Hydrogen Fueling has received an order from Everfuel to supply a hydrogen filling station for a cab fleet in Aarhus. Expansion in Europe is progressing, yet the current headline number is probably too low for the high valuation. Wait and see.
Enapter AG - Analysts discover the value
Green hydrogen is seen as a missing piece of the puzzle for achieving climate goals. Currently, however, the price for production and logistics is still too high. Enapter AG from Saerbeck in North Rhine-Westphalia is one of the few conspicuous values in the H2 segment in Germany. The Company stands for measures for rapid CO2 reduction, and the growing global energy demand thus clearly plays into its growth targets.
With a recent capital increase of EUR 17.8 million and a grant of EUR 5.6 million, Enapter is well equipped to put its investment plans into action in 2021. Recently, Enapter Immobilien GmbH also received an investment grant of EUR 7.16 million from KfW. With this grant, the technology campus could be implemented more quickly, and the banks are also happy to have KfW on board. Because of the public attention for climate projects, Enapter should also attract a good influx of university graduates.
Pareto Securities analysts start coverage of Enapter with a positive outlook. The Company's AEM electrolyzer is mentioned in a particularly positive light. It is said to be technologically better and much more cost-efficient than competing products. The entire market is still very young; respectively, the order volumes are in the homeopathic range. However, Enapter is already working on a clear expansion of production; significant growth is therefore expected in the coming years. However, due to the necessary investments, profits will remain on the back burner until at least 2023. Pareto's initial rating is Buy, with a price target of EUR 34.
The sell-off in the peer group has so far passed Enapter unscathed. With the continuous firing of the entire industry, there are currently reasonable entry prices!
Plug Power - Chart technically down into the cellar
Despite many buy recommendations from American brokers, the price of Plug Power does not really move upwards. At prices below USD 25, the situation is becoming dangerous. A breach of this line had already triggered a further decline of 20% in May.
Of course, Plug Power can always come up with good news. There was currently strengthening in management to approach the growth targets in a more focused manner. The four new managing directors are Ole Hoefelmann, Jose Luis Crespo, Keith Schmid and Sanjay Shrestha. They are tasked with supporting CEO Andy Marsh to achieve the expected record revenue of USD 750 million in 2022. Missing forecasts has led to a sharp sell-off in each release so far.
At USD 13.8 billion, the price-to-sales ratio is still a hefty 18.5, and there will not be a measurable P/E ratio until 2024, according to estimates, either. Remain cautious!
FuelCell Energy - Hardly tangible in analytical terms
Fuelcell Energy shares are among the most sold-off stocks within the hydrogen peer group. The Company has now lost a full 80% from its high of around EUR 24. FuelCell Energy is certainly active in an up-and-coming market. However, the competitive pressure in the hydrogen sector is increasing massively, while more and more large corporations are entering the industry. The upcoming figures are now eagerly awaited.
Many analysts expect a significant increase in sales and a decrease in net loss in the coming years. However, many experts have already been far too optimistic in the past. If there is a positive surprise, there will undoubtedly be a relief jump in the share. Otherwise, it will continue to go downhill because the share is still hardly tangible analytically. However, keep the value on the watch list.
The vast majority of hydrogen stocks are currently unable to meet the exaggerated expectations of the beginning of the year, and the prices are all trending downward. Enapter is a notable exception here; both the successful capital increase and the funding measures received prove the quality of the upcoming projects.