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September 13th, 2023 | 09:05 CEST

Nel share on the verge of recovery? Tui and GoviEx Uranium with a turnaround

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  • Uranium
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Whether in NOK or EUR, the Nel share chart is severely battered. Does this also apply to the Norwegian company itself? Currently, the answer is somewhat mixed. Nel once again proves that the strategic prospects for hydrogen are huge, but the Norwegian's losses are high, and shareholders must expect dilution. In contrast, GoviEx Uranium is looking good at the moment. The Canadians are the only uranium developer with two African projects ready for development and near-term production. Chart-wise, the stock is turning around, and the market capitalization does not seem too high. Tui is doing well operationally, and the summer season should make the tourism group's cash register ring. Analysts remain divided, however.

time to read: 4 minutes | Author: Fabian Lorenz
ISIN: NEL ASA NK-_20 | NO0010081235 , TUI AG NA O.N. | DE000TUAG505 , GOVIEX URANIUM INC A | CA3837981057

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    GoviEx Uranium share with breakout

    Not only have hydrogen stocks disappointed in recent months, but there hasn't been much positive news from the solar and wind sectors either – consider JinkoSolar or Orsted. That's why investors might benefit from looking beyond these sectors. For example, France gets 70% of its electricity from nuclear reactors and thus from uranium. In the US, 90 reactors cover around 20% of electricity requirements. Worldwide, too, the importance of uranium is significant. Uranium power accounts for approximately 10% of electricity generation worldwide.

    It is clear that uranium will continue to be in demand in the coming decades. Thus, GoviEx does not have to worry about sales. The Canadian resource company focuses on the exploration and development of uranium properties in Africa. Its projects are diversified across Niger, Mali and Zambia. GoviEx's goal is to become a uranium producer in the coming years, with a particular focus on the flagship Madaouela project in Niger and the Muntanga project in Zambia. Mining permits have been obtained for both properties. In recent weeks, the share has freed itself from its downward trend and is currently trading at EUR 0.089. With positive newsflow, the share price could return to its yearly high of EUR 0.25.

    Among other things, the update on Muntanga has recently created a good mood. Based on the latest drill results, the measured and indicated resources have been tripled. All mineral categories have also seen grade improvement. GoviEx CEO Daniel Major expressed his satisfaction, "The Muntanga project continues to exceed our expectations, and the latest results from our drilling reinforce our belief in its potential. We are dealing with a resource that is not only quantitatively significant but also of excellent quality. Even more exciting, this upward trend in resource growth continues even with lower uranium prices." The preliminary economic assessment yields attractive results even at a uranium price of USD 50 per pound. This will be incorporated into the ongoing feasibility study.

    GoviEx remains the only uranium developer with two African projects ready for development and near-term production. For this reason, the current market capitalization of under CAD 100 million seems low.

    Tui: Operationally the sun is shining

    The Tui share is currently weak. After falling below EUR 6 in August, the share is presently bottoming out at best. The current summer months are the peak operating season for the tourism group. And if Deutsche Bank has its way, the sun should soon shine again for Tui shareholders. At least the analysts have confirmed their buy recommendation after the figures for the third quarter. The price target is EUR 9.80 and thus a good 73% above the current level. Tui exceeded analysts' estimates in terms of revenue and EBIT. The worst is also over in terms of the balance sheet. The experts anticipate a strong operational performance in the fourth quarter as well. Therefore, the share is considered a "buy".

    Barclays remains among the pessimistic analysts. While the third quarter results were in line with expectations, they see no reason to raise their estimates. Therefore, the price target for the Tui share remains at GBP 4.70 and thus just below the current price of EUR 5.65.

    Nel: Will it go down further?

    Whether in NOK or EUR, the chart of the Nel share is badly battered. Does this also apply to the Norwegian company itself? At the moment, the answer is a bit of a mixed bag. The strategic prospects for hydrogen are undoubtedly huge.

    Nel's electrolysers can make a significant contribution to the decarbonization of the economy worldwide. The most recent example of this is the steel manufacturer Ovako. The Norwegian company has started to meet its energy needs with hydrogen at its site in Hofors. For this purpose, Nel has supplied an alkaline electrolyser with a capacity of 20 MW.

    Ovako CEO Marcus Hedblom: "Our steel mill in Hofors was founded as early as the 16th century, and with the new hydrogen plant, we are starting a new chapter in Swedish steel history. Until now, heating steel products required large quantities of fossil fuels. We are now the first in the world to heat steel with fossil-free hydrogen before rolling, reducing emissions in this production step to almost zero."

    Despite these strategic opportunities, however, Nel is not getting off the ground operationally - especially concerning profitability. For example, the net loss in the second quarter exceeded sales. As a result, there are increasing voices that Nel would have to carry out another capital increase before reaching break-even. Therefore, the analyst's price target of NOK 8 is below the current price level of NOK 10.48. Despite the weak share performance, the market capitalization remains NOK 17.5 billion.

    GoviEx is undisputedly the hot stock of the stocks discussed. However, the uranium stock is not expensive, has left the downtrend and seems to be on a good track operationally. Tui is also doing well operationally. Nevertheless, the stock is not making significant gains. There is currently little reason to buy the Nel share.

    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.

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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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