The Nel share is tumbling, Nordex is gaining momentum, and dynaCERT is building strength

dynaCERT: New impulses on February 21?

The dynaCERT share offers an interesting mix for a comeback in 2024: last year, the Company stepped on the gas operationally and reported numerous orders, especially towards the end of the year. It is, therefore, not surprising that the hydrogen company's shares have been working on a solid bottom around CAD 0.16 in a disastrous industry environment since the fall of 2023. Can the share break out from its sideways trend in the coming week? On February 21, dynaCERT will present at the 10th IIF digital investor conference. (Click here for free registration).

There were certainly several highlights in 2023. Numerous successful pilot projects with dynaCERT's HydraGEN™ technology were followed by initial concrete orders. In context: Conventional diesel engines can be retrofitted with the patented HydraGEN™ system to reduce fuel consumption and pollutant emissions. The devices only require distilled water to produce hydrogen. The Company particularly praised its sales partners Simply Green in Western Canada, Mobile Emissions in Eastern Canada, H2 Tek in the mining industry and GridFix in Australia. Around 200 devices were ordered in the fourth quarter alone. dynaCERT will hopefully report on the status of deliveries next week and perhaps also provide information on new orders.

An update on VERRA certification of the dynaCERT product range would also be exciting. After all, this would signal the start of certificate trading for dynaCERT. Revenues from the sale of certificates are intended to be shared with customers, representing a significant and continuous source of revenue.

Nel: Will quarterly figures bring a turnaround?

Investors are also hoping for rising revenues at Nel. This is the only way the Norwegians can build a profitable business model and grow into the still high valuation. In the third quarter of 2023, development was moving in the right direction. Sales increased significantly, and the loss was reduced more than expected. Can this also be achieved in Q4? Nel will report on the last quarter of the year on February 28. Since there have been practically no new major orders in the past months, the development of the order backlog is likely to be closely monitored.

Analysts are cautious in advance. Most recently, JP Morgan significantly reduced its price target for the Norwegian hydrogen pure-play from NOK 11.40 to NOK 6.40. The analysts point to the poor sentiment in the industry and a standstill in orders. It remains to be seen whether the improvement in operating performance in Q3 can be sustained. The analysts, therefore, currently rate the Nel share as "Neutral".

Nordex: 70% upside potential?

There are positive analyst comments for Nordex. The wind turbine manufacturer reported preliminary figures for 2023 last week. These were not only well received by analysts but also caused the share price to jump by around 10% since last Friday. Following the figures, Jefferies reiterated its "Buy" recommendation for the Nordex share. The price target is EUR 17 and thus around 70% above the current price level. Revenue had slightly exceeded market expectations. Overall, the development is considered solid.

Following the figures, Goldman Sachs even upgraded the Nordex share. Instead of "Neutral", the analyst's assessment is now "Buy". At EUR 15, the price target is not quite as optimistic as that of their colleagues at Jefferies, but this still represents 50% upside potential. In the analysts' view, Nordex is on the right track in terms of margin development. The Company appears capable of implementing higher prices while concurrently reducing costs. The balance sheet situation is also seen to be improving.

Whether the Nordex share will develop positively in the long term must be questioned critically. The Company is relatively small in the competition, and in the past, positive quarters have repeatedly been followed by surprising setbacks. It is not without reason that the share is trading at 2003 levels. dynaCERT currently stands out in the hydrogen sector, but it needs further orders and VERRA certification to break out of the sideways trend. Buying the Nel share is currently not an option. The sentiment is simply too negative. While positive quarterly figures could lead to a jump in the share price, there may be an unpleasant surprise regarding the order backlog.