Constantin Hesse, an analyst from Jefferies, maintained the Hold rating on NEL ASA (NLLSF – Research Report). The associated price target remains the same with NOK3.00.
Constantin Hesse has given his Hold rating due to a combination of factors affecting NEL ASA’s financial performance and future outlook. The company’s recent quarterly results showed revenue growth, but they fell short of expectations, which is a concern for potential investors. Despite implementing cost-saving measures that improved EBITDA and reduced cash burn, the company still faces challenges in order visibility and backlog delivery.
Additionally, while management anticipates better order momentum in the coming year, there is limited visibility, with a significant portion of the backlog at risk due to customers’ funding issues. The decrease in order intake and backlog further complicates the situation. Although cash reserves are substantial, ongoing cash burn and dependency on future orders for cash flow stability contribute to the cautious Hold rating. These factors collectively suggest a need for a wait-and-see approach before making any significant investment decisions.