Ceres Power and ITM still seen as hydrogen winners by US bank
Hydrogen has gone off the oil recently as the sector continues to face delays, with financial investment decisions (FIDs) remaining limited.
US bank Jefferies still sees potential for certain companies within the industry that are showing varying degrees of resilience and outlook improvements.
Ceres Power Holdings PLC (LSE:CWR, OTC:CPWHF) has been upgraded to “Buy” with a 265p target price supported by two new licensing agreements signed in the last ten months.
These agreements with major original equipment manufacturers (OEMs) offer improved revenue visibility through 2027-2028.
Additionally, the company is commissioning a 1-megawatt demonstrator in partnership with Shell, aiming for future scaling to multi-megawatt modules.
Analysts commented,
Ceres looks best positioned once volumes pick up, with solid oxide (SOEC) technology also seeing positive developments,
ITM Power PLC (AIM:ITM) has been maintained as a “Buy,” reflecting its strong backing by industry giants like Linde and Shell.
The company closed 2023 with cash reserves of £230 million and currently has an order backlog of £127 million.
Its participation in the UK’s Hydrogen Allocation Rounds could drive additional orders for its NEPTUNE V systems as the country targets 1 gigawatt of capacity by 2025.
The analysis noted,
ITM is backed by large and reputable players in the industry, with Linde as a key shareholder,
Norway’s Nel has been downgraded to “Underperform,” as slow order momentum and delays continue to weigh on the company’s performance.
With cash reserves at NOK1.90 billion and a projected cash burn of approximately NOK800.00 million in 2025, Nel faces significant financial pressures.
The current backlog covers only about one year of revenues.
The note highlighted,
Order momentum has been very slow due to project delays, with the current backlog covering only approximately one year’s worth of revenues,
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Ceres Power and ITM still seen as hydrogen winners by US bank, source
