The shares of Nel Hydrogen Norway are expected to rise by more than 20% thanks to the latest set of green subsidies in both the US and Europe, according to Morgan Stanley. Nel, founded in 1927, produces hydrogen using renewable energy by separating hydrogen from water through electrolysis. The investment bank said green hydrogen will be a “key beneficiary” of the cleantech stimulus plan on both sides of the Atlantic, with Nel pointing out “one of the few ways to play the European Green Deal” for investors. The push for green energy has gotten a new boost after the US announced a $369 billion subsidy program through the Inflation Reduction Act last year. In response, the European Union announced the Green Deal Industrial Plan earlier this year. Morgan Stanley said Nel Shares, which trade in the US and Europe, will rise to 22 Norwegian Kroner ($2.15) over the next 12 months. The company’s stock has increased 35% this year. NLLSF YTD line “We think clearly, the regulatory support will boost confidence in the possibility of hydrogen growth opportunities materializing, impacting the value in the name of hydrogen,” said analysts led by Arthur Sitbon in a note to clients on February 7. Apart from sectoral. tailwinds, Nel shares also benefit from being one of the few listed green hydrogen companies, said analysts. That means the lack of options will force investors to buy Nel to gain exposure to the sector. Wall Street banks say the competitors are either very small, private, or just a small part of a large group. Morgan Stanley is also bearish on ITM Power shares, which is one of the few viable alternatives, according to the bank. “In this context, we expect NEL to trade at a higher structural multiple due to its shortfall,” the analyst added. Analysts’ positive outlook this year is in stark contrast to their outlook for 2022. Investment banks have repeatedly cut forecasts in the past year after a series of earnings misses driven by weak order momentum and supply chain challenges. However, Morgan Stanley believes that sentiment has reached rock bottom, and shares of the company are likely to rise from the current level. Nel also reported a solid start to the year by announcing a potential deal involving two 60 MW electrolyser plants with German company HH2E. According to Norwegian investment bank Arctic Securities, if the deal goes through, Nel will get three 100 MW contracts in six months. By comparison, the entire electrolyzer market will be around 200 MW by 2020, according to Bloomberg New Energy Finance.