Nel ASA: Hydrogen Pioneer in a Race Against Time
The renewable energy market is highly competitive, and Nel ASA is currently feeling this pressure from every conceivable direction. While the long-term vision of a green, emissions-free hydrogen economy remains intact in politics in Norway and across Europe, the harsh winds of economic reality prevail in day-to-day operations. Although the order books are “bursting at the seams,” the decisive test for management is yet to come. Norway’s latest quarterly figures reveal a dangerous gap between order intake and actual, hard-earned revenue. As a result, the share price is currently languishing dangerously close to its annual low. It urgently needs momentum to prevent another plunge.
The second-quarter figures were rather mediocre. A massive 224% jump in orders shows that major industrial customers have not lost confidence in the advanced electrolyzer technology. Order intake climbed rapidly to the equivalent of approximately EUR 19.5 million, bringing the total order backlog to a reassuring cushion of over EUR 102 million. However, actual contract revenue fell by 12% over the same period to just under EUR 13 million. Similarly, a negative operating result of approximately EUR -13.1 million is weighing on the balance sheet and continues to dampen shareholder sentiment.
The upcoming quarterly report on October 21 could therefore become the next, and perhaps ultimate, day of reckoning for the Norwegian hydrogen specialist. The absolutely central question for the market will then likely be whether management can finally turn the massive backlog of orders into profitably billable revenue. Only when the order backlog is quickly and reliably converted into cash will the stock have significant recovery potential. The vacant CEO position following the surprise announcement of the previous CEO’s departure is causing further unnecessary uncertainty among investors who are already on edge. Time is of the essence, as the patience of loyal investors has now almost completely run out after the long, loss-ridden dry spells.
From the harsh climate of the Nordic hydrogen industry, we now turn to pharmaceuticals and agrochemicals.
Bayer: The Sleeping Giant on the Verge of a Major Turnaround
Bayer has endured extremely turbulent and nerve-wracking months and years, largely shaped by the costly legal aftermath of the Monsanto acquisition. Once the most valuable company in Germany’s leading index, it fell to an all-time low in shareholder favour. However, it has recovered significantly from those lows, and a fresh, unexpectedly high price target from Barclays is shaking up the market and fueling concrete hope for further price gains. With an upward revision to EUR 70, the British experts see a price potential of over 40%, which immediately breathed new life into the stock.
Operationally, the Leverkusen-based company is providing solid, convincing reasons for this emerging confidence in the stock market. In the second quarter just ended, total revenue rose to EUR 10.9 billion. The strong agricultural business also contributed significantly. In particular, revenue growth from entirely new drugs shows the group has not lost its innovative strength in research. Global revenue for the important kidney drug Kerendia climbed by 75% to a remarkable EUR 603 million. At the same time, the important agricultural division improved its operating profit by more than 30%, underscoring the strategic recovery of the core business.
Despite a modest dividend yield, the stock stands out for its fundamental undervaluation relative to the international pharmaceutical sector. Analysts expect earnings growth over the next few years that is virtually unparalleled across the peer group. A pending multi-billion-dollar class-action settlement in the US totaling USD 7.25 billion could also finally draw a long-awaited, liberating line under the ruinous glyphosate saga. That would be immensely important for Bayer.
A well-stocked research pipeline and growing legal clarity could soon give the share price another strong boost and drive it higher. In that case, a price target of EUR 70 might not be so unrealistic after all.
Our third company is still relatively unknown and is not in the spotlight quite as much as Bayer or Nel. It is based in North America and has an extremely smart concept for the green energy transition.
RE Royalties: The Secret Beneficiary of the Green Revolution
The global and politically driven energy transition requires and devours huge amounts of fresh capital every single day. This is exactly where the Canadian financial company RE Royalties comes in with a highly astute strategy. Instead of building expensive, high-maintenance solar farms or massive wind turbines itself, the company provides project developers with the necessary funding and, in return, secures lucrative, long-term royalty payments.
This business model appears simple at first glance but is well thought out, directly combining sustainable energy projects with predictable revenue and steady cash flows. This approach reduces construction and operational risks while enabling strong, continuous growth through profit reinvestment.
Just under a month ago, on August 5, RE Royalties announced an expansion of its already highly diversified portfolio. It invested an additional USD 1.00 million in a strong US solar project with its partner, Solaris Energy, bringing its total commitment there to a substantial USD 4.80 million. With this strategic multi-million-dollar financing, the company is securing valuable market share in the booming North American renewable energy sector.
At the same time, a non-binding Letter of Intent (LOI) was signed for a volume of up to USD 67.50 million to jointly finance up to 83 additional promising solar projects in the near future. This impressively demonstrates to the stock market the momentum with which the company is currently rolling out its licensing network across the entire continent.
Financially, the company has long stood out for reliable, steady cash flow, which enables regular payments of attractive distributions to shareholders. With an impressive dividend yield, sometimes exceeding 10%, this relatively unknown stock is inevitably attracting the attention of dividend seekers. This exceptionally high dividend makes the stock a highly exciting and strategically valuable addition to a portfolio, especially for income-oriented investors. Management uses the capital raised to maximize long-term, sustainable returns for shareholders.
Looking at the chart, we currently see an interesting setup for bold investors. RE Royalties’ stock would now need to quickly break out of the distinctive pennant pattern at CAD 0.40 to 0.42 to dynamically resume the uptrend from December 2025 to March 2026. During that phase, which was extremely strong from a technical analysis perspective, the stock virtually doubled from approximately CAD 0.22 to a robust CAD 0.45, much to investors’ delight. On the downside, reliable horizontal support lies between CAD 0.35 and CAD 0.40. If the price regains strong upward momentum, a first realistic target, according to classical technical analysis, lies around CAD 0.50. If it breaks above that level, the CAD 0.60 to 0.70 level will then come directly into the bulls’ sights relatively quickly.
Nel ASA remains the prime example of a genuine and high-risk bet on the inevitable green future. However, the company now urgently needs to deliver tangible financial results, particularly in the short term, to prevent further erosion of shareholder confidence. Bayer presents itself as the former turnaround candidate in the German stock index that, with its robust operational foundation and a potential legal breakthrough in the US, continues to offer enormous upside potential for bold investors. RE Royalties, meanwhile, is the quiet but highly lucrative beneficiary of the global energy transition. The company is growing, delivering strong returns to investors, and also presents a compelling technical setup that could soon lead to a breakout.
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