Neste's Stock Performance#

Neste Oyj, a Finnish refiner, saw its shares jump over 5% on Thursday. This increase followed an upgrade from RBC Capital Markets, which changed its rating from "sector perform" to "outperform." RBC also raised its price target for Neste from €20 to €30, citing the ongoing conflict in Iran as a key factor driving up prices for refined products.

Impact of the Iran Conflict#

Analyst Adnan Dhanani noted that the duration of the Iran conflict is crucial, but as long as it continues, Neste's earnings outlook appears increasingly favorable. The conflict has led to a significant rise in the prices of refined products, which Neste is well-positioned to benefit from in both its oil and renewable fuels sectors.

Financial Forecasts#

RBC has increased its earnings estimates for Neste significantly. For 2026, the group’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) estimate has been raised by 23% to €2.446 billion. This includes a 44% increase in the forecast for Oil Products EBITDA to €766 million and a 16% increase for Renewable Products EBITDA to €1.572 billion. Additionally, the estimated earnings per share (EPS) for 2026 has risen by 50%, now projected at €1.35.

Market Dynamics#

The prices of European diesel have surged from $700 per ton before the conflict to approximately $1,100 per ton. Neste has indicated that for every $50 per ton change in its renewable products margin, there is a $280 million impact on operating profit. RBC anticipates that sales margins for Neste could increase by 10%-15% in the upcoming quarters. Furthermore, RBC's estimates for Neste's first-quarter 2026 Oil Products EBITDA stand at €282 million, which is 40% above market consensus.

Performance Improvement Initiatives#

RBC also highlighted Neste's performance improvement program, which achieved €376 million in annualized EBITDA gains for 2025, surpassing the company’s target of €350 million ahead of schedule. Management believes there is still potential for further improvements. Despite the release of strategic reserves by the IEA, RBC stated that this does not significantly change the overall supply situation.