Goldman Sachs has moved Neste Oyj (HE:NESTE) from a Neutral rating to Buy and increased its price target to EUR24.00 from EUR20.50, citing improved conditions in the renewable diesel segment. The investment bank highlighted tighter market dynamics for renewable diesel and sustainable aviation fuel - SAF - that have supported a stronger outlook for margins.
Shares of Neste have rallied substantially over the last year, up 78% and trading close to their 52-week high. According to InvestingPro data, the stock currently appears slightly undervalued when compared with Fair Value estimates.
Market and feedstock moves
Goldman Sachs noted that European spot prices for renewable diesel and SAF climbed by 11-14% quarter-over-quarter. The bank attributes this rise to compliance-driven demand ahead of year-end and to reduced imports from China and the United States during what it describes as a maintenance season.
On the feedstock side, price behavior has been mixed. The bank reported that prices for Chinese used cooking oil remained largely flat, while Australian tallow fell by 20% quarter-over-quarter. At the same time, fossil diesel prices stayed firm. Goldman Sachs assesses this spread - stable or lower feedstock prices versus robust fossil diesel - as a positive margin dynamic for Neste.
Earnings expectations and near-term timing
Goldman Sachs expects Neste to deliver a fourth-quarter EBITDA of EUR642 million. That figure represents a 20% quarter-over-quarter increase and is roughly 20% above the Bloomberg consensus EBITDA estimate of EUR530 million. Investors can look for confirmation of results on February 5, the date listed by InvestingPro for Neste's earnings release.
InvestingPro data also shows that while Neste has not been profitable over the last twelve months, analysts forecast a return to profitability in the current year - an outcome flagged in InvestingPro's financial analysis tools.
Regulation as a potential upside
Goldman Sachs pointed to Germany's approval of the RED3 draft law on December 10. The bank expects the draft to complete the legislative process in the first quarter of 2026. If enacted as envisioned, the change could eliminate double-counting mechanisms for advanced biofuels and, per Goldman Sachs, potentially raise German renewable diesel demand by 1.5 million tons in 2026 and increase overall European demand by about 2 million tons. The firm sees this as a regulatory tailwind that could support Neste's revenue prospects.
Valuation and other broker moves
Goldman Sachs' upgrade arrives alongside a note on valuation: Neste currently trades at an enterprise-value-to-EBITDA multiple of 27.85, a level that reflects substantial growth expectations already priced into the stock.
In separate activity, BNP Paribas Exane downgraded Neste from Outperform to Neutral while maintaining a EUR19.00 price target. The firm cited the stock's recent rally - roughly 30% over the past three months and more than 50% year-to-date - noting that the share price has moved in line with its target.
These developments provide investors with competing analyst perspectives: Goldman Sachs points to improving market fundamentals and regulatory upside that justify a Buy rating and a higher target, while BNP Paribas Exane views the recent price advance as constraining further upside relative to its target.
Key takeaways
- Goldman Sachs upgraded Neste to Buy and raised its target to EUR24.00.
- Goldman forecasts Q4 EBITDA of EUR642 million, above Bloomberg consensus of EUR530 million; Neste reports earnings on February 5.
- Regulatory changes in Germany and across Europe could increase renewable diesel demand materially in 2026, per Goldman Sachs.