European hydrogen shares have "found a base", says Citigroup after being hit by factors such as thematic-driven outflows, a lack of fresh policy catalysts and good old-fashioned profit-taking after their strong gains last year.
Electrolyser companies around European markets have seen their shares down on average circa 48% from the 26 January peak, the investment bank pointed out in a note to clients.
However, the Citi analysts said they see an “expected pick-up in orders, rollout of dedicated solar/wind projects, upcoming policy-support (including US participation) and better share price entry points as reasons to remain constructive on European hydrogen equities”.
Encouraging signs of late include announcements on more 160GW of electrolyser projects, the analysts noted, as well as dedicated renewables energy projects around the continent.
“Better order momentum” is seen in the second half of 2021.
“While cutting estimates, we still see up to circa 45% upside to current share prices,” Citi said, reiterating 'buy' ratings on Ceres Power Holdings PLC (LON:CWR), ITM and Nel, while remaining 'neutral' on Powercell Sweden.