Barclays cuts European hydrogen companies on scale-up challenges

Mcphy Energy SA

12/10/2023 14:20

** Barclays cuts Nel  NEL.OL , ITM Power  ITM.L , and Mcphy
Energy  MCPHY.PA , citing scale-up challenges with the hydrogen
market's growth expected to commence around 2030
    ** "We've learnt over the past 18 months the scale-up takes
time, and the listed electrolyser companies are not necessarily
the best exposed," says the brokerage in a note
    ** Barclays expects government policy to move to support the
development of infrastructure, as it sees capital costs just for
production equipment to amount to nearly $500 bln until 2050
    ** It also predicts an eight-fold growth in the hydrogen
market over the next 30 years, but emphasizes electrolyser
manufacturers' difficulty transitioning from small-scale to
large-scale operations
    ** It cuts Nel to "equalweight", while giving peers British
ITM Power and French Mcphy Energy an "underwight" recommendation
    ** However, the brokerage favors Nel on "its track record of
offering technology-agnostic solutions to large-scale green
hydrogen projects"
    ** Shares of Nel are down 3.8%, among worst performers of
pan-European 600 index  .STOXX 
    

 (Reporting by Jesus Calero)
 ((Jesus.calero@thomsonreuters.com))