MS cautious on pace of green hydrogen adoption

Nel ASA

30/10/2024 11:37

** Morgan Stanley expects green hydrogen's adoption path to
remain "long and bumpy", seeing a challenging environment for
longer for hydrogen OEMs
    ** Higher costs, uncertain subsidies and competition for
power & equipment create a tough backdrop for the roll-out of
green hydrogen, the broker says
    ** It still sees, however, an order inflection point for the
industry, but adds that the timing remains "highly uncertain" 
    ** The broker prefers hydrogen OEMs with a strong cash
position and imminent revenue inflection point
    ** MS sees a better risk-reward profile for ITM Power
 ITM.L  in the coming quarters, hence upgrades the UK company to
"equal weight" from "underweight"
    ** "ITM Power looks better funded and less vulnerable to a
lack of large orders for longer than Nel," as per the brokerage
    ** MS downgrades Nel  NEL.OL  to "underweight" from
"equal-weight" citing relative uncertainty on the U.S. market
given the upcoming presidential election
    ** It also sees the Norwegian company's net cash/annual cash
burn could come down to 1.4x by end-2025, leading to need of
large orders in 2025 and/or raising new funding in 2026

 (Reporting by Marta Frąckowiak)
 ((marta.frackowiak@thomsonreuters.com))