Jefferies cautious on hydrogen as challenges mount
26/02/2024 11:29
** Jefferies says the hydrogen industry faces macroeconomic
challenges coupled with a lack of clarity on regulation and
future demand, which has led to continued delays in final
investment decisions
** Green hydrogen's role in the energy transition remains
somewhat uncertain, the broker says, as fewer than 4% of
announced projects have reached firm investment decisions or are
currently under construction
** The high cost of hydrogen produced through electrolysis
is a major obstacle in the widespread adoption of green
hydrogen, it adds
** The brokerage also flags absence of appropriate
infrastructure, noting infrastructure development has come into
policy debate only recently
** Jefferies has a cautious stance on the sector, and
favours players with strong balance sheets and potential
short-term momentum
** The broker cuts Nel NEL.OL to "hold" from "buy" on
diminished order visibility and risk of another capital increase
in 2025
** It upgrades ITM Power ITM.L to "buy" from "hold",
seeing the company as better positioned for future profitable
growth thanks to improved short-term visibility
** It keeps "hold" on Ceres CWR.L and PowerCell
PCELL.ST , cautious on the growth outlook of fuel cells due to
increased competition from electrification
(Reporting by Marta Frąckowiak)
((marta.frackowiak@thomsonreuters.com))