NEL, der Wasserstoffplayer aus Norwegen

Shares of Norway’s Nel Hydrogen
are expected to rise by more than 20% thanks to the latest set of green subsidies in both the U.S. and Europe, according to Morgan Stanley.

Nel, founded in 1927, produces hydrogen using renewable energy by splitting hydrogen from water through electrolysis.

The investment bank said green hydrogen would be a “key beneficiary” of cleantech stimulus plans on both sides of the Atlantic, with Nel shares “one of only a few ways to play the European Green Deal” for investors.

The push for green energy has gained fresh impetus after the U.S. unveiled its $369 billion subsidy program through the Inflation Reduction Act last year. In response, the European Union announced its Green Deal Industrial Plan earlier this year.

Morgan Stanley says Nel shares, which trade in the U.S.
and Europe
, will rise to 22 Norwegian Kroner ($2.15) over the next 12 months. Shares of the company have already increased by 35% this year.

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“We think clear, supportive regulation will boost confidence in the likelihood of the growth hydrogen opportunity materialising, impacting valuation on hydrogen names,” said analysts led by Arthur Sitbon in a note to clients on Feb. 7.

Apart from the sectoral tailwinds, Nel shares also benefit from being one of the few listed green hydrogen companies, said the analysts. That means a lack of choice will force investors to buy Nel to gain exposure to the sector.