Royal Bank of Canada on Friday renewed its 'outperform' rating and 16 euro price target on McPhy Energy, following yesterday's signing of a licensing agreement with India's Larsen & Toubro.

In a reaction note, the Canadian broker sees this as a 'positive' development that will enable the hydrogen production equipment specialist to open the doors to a potential new market.

While RBC appreciates McPhy's industrial assets, which it believes put it in a good position to benefit from the demand surrounding green hydrogen industrial projects in Europe, the broker points out that the agreement with Larsen & Toubro represents a much larger market, but also the promise of more comfortable profit margins due to the advantages of the licensing model.

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