Shares of Neste Oyj rallied over 5% on Thursday after RBC Capital Markets moved the stock to an "outperform" rating from "sector perform" and raised its target price to €30 from €20. The firm said the ongoing conflict involving Iran has pushed refined product prices higher, creating a more attractive near-term earnings profile for the company that is positioned to benefit across both oil and renewable fuels operations.
"Duration matters, but every day this conflict continues, Neste’s near-term earnings outlook looks more attractive," analyst Adnan Dhanani wrote in the note accompanying the change in rating.
RBC raised its 2026 group EBITDA estimate by 23% to €2.446 billion. That upgrade reflects a 44% increase in the bank’s Oil Products EBITDA forecast to €766 million and a 16% rise in its Renewable Products EBITDA projection to €1.572 billion - both figures sit above Visible Alpha consensus, according to the note. The broker also increased its 2026 comparable EPS estimate by 50% to €1.35 from a prior €0.90.
Market moves driving the revisions include a steep jump in European diesel prices, which RBC said have climbed from $700 per ton before the conflict to roughly $1,100 per ton, while renewable diesel has risen by about $150 per ton. Neste itself highlights a sensitivity of $280 million in operating profit for every $50 per ton change in its renewable products margin.
Management commentary provided on the company's fourth-quarter 2025 call was cited by RBC, noting that roughly 60% of Neste’s 2026 volumes have already been secured under term contracts and that the premium captured on those contracts was "significantly higher than last year’s." Based on that backdrop, RBC sees room for comparable sales margin consensus to move 10%-15% higher in the second and third quarters of 2026.
For the first quarter of 2026, RBC’s estimate for the renewable products sales margin is $644 per ton, compared with $479 per ton in the prior quarter and a Visible Alpha consensus of $599 per ton. That margin assumption translates to segment EBITDA of €347 million, roughly 8% above consensus, per RBC.
On the oil products side, diesel cracks have strengthened to above $50 per barrel from about $20 per barrel at the start of the year. RBC laid out 2026 refining margin estimates of $18 per barrel in Q1, $16.50 in Q2, $14 in Q3 and $12 in Q4. Using those inputs, the bank’s first-quarter Oil Products EBITDA estimate is €282 million, about 40% above consensus, which helps drive total first-quarter group EBITDA to €653 million versus a consensus figure of €564 million.
RBC also pointed to operational gains Dentro Neste’s performance improvement program. The program delivered €376 million in annualized run-rate EBITDA improvements in 2025, exceeding the company’s €350 million target ahead of schedule. Management commented that "there’s still good potential to raise that number even more."
Addressing wider supply considerations, RBC noted that the International Energy Agency’s 400 million barrel strategic reserve release - an amount Bloomberg estimates would cover about 20 days of disrupted Strait of Hormuz flows - does not materially change the supply picture, according to the bank’s assessment.
Sections impacted:
- Energy - refining and fuel supply dynamics
- Renewable fuels - renewable diesel margins and contract pricing
- Equity markets - analyst revisions and stock ratings