13. January 2021 | 14:57 CET
NEL, dynaCERT, K+S: Where analysts see 280% potential
Innovative technology brings returns to investors. The best example is the share of the Norwegian hydrogen specialist NEL. In the past twelve months, the value has increased by more than 250%. The reason: The mobility revolution is underway and many experts see hydrogen as the next big thing. However, billions in investments are needed to produce, store and distribute hydrogen - and that's precisely what NEL shareholders are speculating on. Trees don't grow to the sky on the stock market and every trend comes to an end. In the case of NEL, however, pessimists have been caught on the wrong foot in recent weeks. As soon as the chart showed a warning signal and the share price hesitated for a moment, the stock surged ahead and marked a new high. How long will this continue?
time to read: 2 minutes by Nico Popp
"[...] Why should a modular electrolyzer cost more than a motorcycle? [...]" Sebastian-Justus Schmidt, CEO and Founder, Enapter AG
NEL: Analysts no longer keep up
Looking at the opinions of analysts around NEL, a mixed picture emerges. Less than half of the experts recommended the stock as a buy in December. Some of the price targets for these buy recommendations have already been achieved. The discrepancy between analyst opinion and stock price is no wonder. NEL will only generate sales of around EUR 100 million in 2021 - but at the same time is valued at over EUR 4 billion. Given the sustained highs, investors should be cautious with NEL. Indeed, anything is possible on the stock market - but the opposite is also true. Caution, therefore, does no harm.
dynaCERT as "Top Pick 2021": Haywood sees 280% share price potential
Another exciting company whose share price has not yet experienced a record rally and was recently praised by an analyst firm with a high share price potential is dynaCERT. The Canadian Company offers a patented hydrogen-based electrolysis system to reduce fuel consumption and emissions in large diesel engines by up to 19%. In the past, dynaCERT has signed several contracts with municipalities in North America, helping them keep their cities clean by retrofitting buses and other equipment. The second business area includes telematics software. This software allows dynaCERT's customers to measure their CO2 savings and even receive emission rights.
Just yesterday, analysts at Haywood Capital Markets published a list of their top picks for 2021, included in the sustainability category: dynaCERT, with a price target of CAD 2.20. Yesterday, the share closed at CAD 0.58. According to Haywood Capital Markets, this results in a price potential of almost 280%. The analysts praise dynaCERT's synergistic business model with its combination of electrolysis systems and telematics software and see catch-up potential in the stock. Some stock options had recently come off the market, which had weighed on the share price somewhat in recent months.
Further, Haywood anticipates that dynaCERT's technology could prove useful in the mining sector. Equipped with electrolysis systems and software, heavy equipment with fuel costs of CAD 100,000 per year could directly recover the initial cost of CAD 6,000. Analysts at GBC Research had already attested to the Company's price potential of up to CAD 2.20 in the past - compared to shares such as NEL (EUR 4.5 billion), Plug Power (EUR 25.3 billion) or Everfuel (EUR 1.3 billion), the market capitalization of the Canadians is only about EUR 138 million.
K+S: Turnaround with the handbrake on
One share that has also attracted increased attention in recent days is the fertilizer specialist K+S. After years of decline, the Company managed to achieve an operational turnaround with its US business sale. From a chart perspective, the share now looks good. If you look at the share over a three-year period, you can see that the stock is breaking free from its downward trend. However, it is not yet clear that the stock will immediately find its way back to the road to success. Analysts are still not convinced. Most recently, analysts at JPMorgan gave K+S an "underweight" rating and set a target price of EUR 7.60 - well below the current price of EUR 9.77.
After years of a downward trend, it will take time for the idea of a turnaround to hit the market. Also, analysts who rely on hard facts are always a little behind the curve when it comes to turnaround stories. The situation is different for stocks whose potential has not yet been fully realized by the market, such as dynaCERT. Here, analysts often anticipate developments that the market has not yet recognized. It is up to the investor to identify how to deal with analysts' opinions.