Shares of Norway’s Nel Hydrogen are expected to rise more than 20% thanks to the latest green subsidies in both the United States 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 says green hydrogen will be a “major beneficiary” of clean tech stimulus plans on both sides of the Atlantic, with Nel sharing “one of the few ways to play the European Green Deal”. ” for investors. The push for green energy gained new impetus after the United States announced a $369 billion subsidy program through the Inflation Reduction Act last year. In response, the European Union announced its Green Deal Industry Plan earlier this year. Morgan Stanley said shares of Nel, which trades in the US and Europe, will rise to 22 Norwegian Krone ($2.15) over the next 12 months. The company’s shares are up 35% this year. Analysts led by Arthur Sitbon said in a note to clients on Feb. 7. The analysts said that, if favorable, Nel’s stock also benefits from being one of them. Few green hydrogen companies are listed. That means a lack of choice will force investors to buy Nel for exposure to the sector. The Wall Street bank thinks competitors are either too small, private or just a fraction of large corporations. Morgan Stanley is also discounting shares of ITM Power, which is one of the few viable alternatives, according to the bank. In this context, we expect NEL to trade above structurally higher multiples due to its scarce value, the analysts added. Analysts’ positive outlook for this year stands in stark contrast to their view for 2022. Investment banks repeatedly slashed their estimates last year after repeatedly falling short in earnings. due to weak order momentum and supply chain challenges. However, Morgan Stanley believes that market sentiment has bottomed out and the company’s shares are likely to rise from current levels. Nel also reported a solid start to the year by announcing potential deals involving two 60 MW electrolytic plants with German company HH2E. According to Norwegian investment bank Arctic Securities, if the deal goes through, Nel will win three 100 MW contracts over six months. By comparison, the entire electrolyzer market amounts to about 200 MW by 2020, according to Bloomberg New Energy Finance.