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1. Company Snapshot

1.a. Company Description

Neste Oyj provides renewable and oil products in Finland and other Nordic countries, Baltic Rim, other European countries, North and South America, and internationally.The company operates in four segments: Renewable Products, Oil Products, Marketing & Services, and Others.The Renewable Products segment produces, markets, and sells renewable diesel, renewable jet fuels and solutions, and renewable solvents, as well as raw material for bioplastics based on its technology to wholesale markets.


The Oil Products segment produces, markets, and sells diesel fuel, gasoline, aviation and marine fuels, light and heavy fuel oils, base oils, gasoline components, small engine gasoline, solvents, liquid gases, and bitumen.This segment serves retailers and distributors, oil majors and trading companies, petrochemicals companies, and companies marketing lubricants and solvents.The Marketing & Services segment markets and sells petroleum products and associated services to private motorists, industry, transport companies, farmers, and heating oil customers through a network of 947 service stations, as well as direct sales.


The Others segment offers engineering and technology solutions.The company also manufactures raw materials for polymers and chemicals materials.The company was formerly known as Neste Oil Oyj and changed its name to Neste Oyj in June 2015.


Neste Oyj was founded in 1948 and is headquartered in Espoo, Finland.

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1.b. Last Insights on NESTE

Neste Oyj's recent performance has been positively driven by its strong fundamentals and resilient market conditions. The European market rally, fueled by technology stocks and expectations of lower US borrowing costs, has created a favorable landscape. Neste's undervalued stock price, as noted by investors, presents an opportunity. A recent rating upgrade or affirmation from a reputable source, such as Bloomberg or Refinitiv, could further boost investor confidence. Additionally, a potential share buyback program could reduce outstanding shares, increasing relative value for shareholders.

1.c. Company Highlights

2. Neste's Q3 Earnings: A Strong Performance Amidst Regulatory Developments

Neste reported a robust Q3 financial performance, with comparable EBITDA reaching EUR 531 million, driven by a strong showing from its Renewable Products segment, which contributed EUR 266 million. Earnings per share (EPS) came in at EUR 0.23, beating analyst estimates of EUR 0.1804. The company's performance improvement program is on track, having achieved EUR 229 million in savings, with a year-to-date impact of EUR 84 million. Revenue growth is expected to be around 2.4% next year, according to analyst estimates.

Publication Date: Nov -03

📋 Highlights
  • Q3 Comparable EBITDA: reached EUR 531 million, driven by EUR 266 million from Renewable Products.
  • Performance Improvement Program: achieved EUR 229 million in savings, with EUR 84 million realized year-to-date.
  • CapEx reduction: to EUR 1 billion, with EUR 700 million allocated for Rotterdam project in 2026.
  • Feedstock optimization: benefits from declining animal fat prices in Asia/Australia, though European regulations limit usage.
  • Operated production utilization: remains at ~80%, with plans to improve through debottlenecking and investments.

Financial Highlights

The company's cash flow and profitability remained solid, with a slight headwind on working capital. Leverage is below the 40% target, indicating a healthy balance sheet. Eeva Sipila, CFO, noted that the company is well-provided with inventory to serve customers, and the ramp-up in Rotterdam will determine whether there's excess inventory to sell.

Regulatory Developments and Market Outlook

Regulatory developments in Europe and the US are supporting the long-term renewables demand outlook, with momentum building in Europe and Asia. Heikki Malinen, CEO, highlighted that the recent news and decisions are favorable for Neste, particularly in Germany, where the RED III implementation could lead to a potential volume upside of 1-2 million tons.

Valuation and Metrics

With a P/E Ratio of -68.04 and an EV/EBITDA of 46.06, Neste's valuation metrics indicate that the market is pricing in significant growth expectations. The Dividend Yield stands at 4.5%, providing a relatively attractive return for investors. The Net Debt / EBITDA ratio is at 11.16, which is a consideration for investors assessing the company's debt levels.

Operational Performance

Neste's Renewable Products division has seen favorable spot margins in Europe, but maintenance at Rotterdam and Singapore will limit the company's ability to take advantage of these prices in Q4. The company's Martinez refinery is running well, and Neste is working on optimizing feedstock purchases and crude slate.

Outlook and Guidance

Neste's stance on market outlook and guidance remains unchanged, with expectations to continue selling its products in various regions. The company is hopeful about the potential volume upside from regulatory developments and is well-positioned to adapt to changing market conditions.

3. NewsRoom

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European Stocks Priced Below Estimated Value In October 2025

Oct -06

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European Equity Picks That Might Be Trading Below Fair Value In September 2025

Sep -04

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Europe HVO for Data Center Backup Market Report 2025-2034, with Profiles of Neste, Repsol, TotalEnergies, Eni, Crown Oil, Certas Energy, LubiQ HVO Fuels, Rolls-Royce, and Moteurs Baudouin

Sep -01

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Asia-Pacific HVO for Data Center Backup Market Analysis and Forecast 2025-2034 | Hydrotreated Vegetable Oil Expands as a Key Backup Fuel in Asia-Pacific's Digital Transformation

Aug -25

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3 European Stocks Estimated To Be Trading Up To 49.2% Below Intrinsic Value

Aug -06

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HVO (Hydrotreated Vegetable Oil) for Data Center Backup Market Analysis Report 2025: Neste, Rapsol, TotalEnergies, Phillips 66, and ENI Lead the Highly Competitive $38 Million Market

Jul -15

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Next-Gen Feedstocks for Sustainable Chemicals Market Analysis Report 2025-2034 | Neste and Enerkem are Leading Efforts in Waste-to-chemical Technologies

Jul -14

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3 European Stocks That May Be Undervalued In July 2025

Jul -03

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.98%)

6. Segments

Oil Products

Expected Growth: 14%

Neste Oyj's 14% growth in Oil Products is driven by increasing demand for low-carbon renewable fuels, strategic expansion into new markets, and continuous improvement in operational efficiency. Additionally, the company's focus on sustainable aviation fuels and renewable diesel production contributes to its growth momentum.

Renewable Products

Expected Growth: 18%

Neste Oyj's 18% growth in Renewable Products is driven by increasing demand for low-carbon fuels, government incentives for renewable energy, and strategic partnerships to expand production capacity. Additionally, growing adoption of sustainable aviation fuels and rising sales of renewable diesel contribute to the segment's growth.

Marketing & Services

Expected Growth: 12%

Neste Oyj's Marketing & Services segment growth of 12% is driven by increasing demand for low-carbon renewable fuels, expansion of its retail network, and strategic partnerships. Additionally, the company's focus on digitalization and e-mobility solutions, as well as its strong brand recognition, contribute to its growth momentum.

Others

Expected Growth: 10%

Neste Oyj's growth is driven by increasing demand for renewable energy, government incentives for sustainable fuels, and strategic expansion into new markets. Additionally, the company's focus on research and development, particularly in renewable diesel and aviation fuels, has enabled it to stay ahead of the competition and capitalize on emerging opportunities.

7. Detailed Products

Renewable Diesel

Neste's renewable diesel is a low-carbon, high-quality diesel fuel made from 100% renewable raw materials, such as waste and residues.

Sustainable Aviation Fuel

Neste's sustainable aviation fuel is a low-carbon, high-quality fuel made from 100% renewable raw materials, such as waste and residues.

Renewable Naphtha

Neste's renewable naphtha is a low-carbon, high-quality feedstock made from 100% renewable raw materials, such as waste and residues.

Biodiesel

Neste's biodiesel is a low-carbon, high-quality diesel fuel made from renewable raw materials, such as vegetable oils and waste fats.

Base Oils

Neste's base oils are high-quality lubricant base oils made from fossil and renewable raw materials.

Gasoline

Neste's gasoline is a high-quality fuel made from fossil raw materials.

Heating Oils

Neste's heating oils are high-quality fuels made from fossil raw materials.

8. Neste Oyj's Porter Forces

Forces Ranking

Threat Of Substitutes

Neste Oyj's renewable energy products are highly specialized, making substitutes less likely. However, the increasing adoption of electric vehicles and alternative energy sources poses a moderate threat.

Bargaining Power Of Customers

Neste Oyj's customers are largely industrial and commercial entities, which have limited bargaining power due to their dependence on Neste's specialized products.

Bargaining Power Of Suppliers

Neste Oyj relies on a diverse range of suppliers for its raw materials, which reduces the bargaining power of individual suppliers. However, the company's dependence on certain critical suppliers poses a moderate risk.

Threat Of New Entrants

The renewable energy industry has high barriers to entry, including significant capital requirements and regulatory hurdles, making it difficult for new entrants to challenge Neste Oyj's market position.

Intensity Of Rivalry

The renewable energy industry is highly competitive, with several established players competing for market share. Neste Oyj faces intense rivalry from companies such as Total, Shell, and ExxonMobil.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 28.05%
Debt Cost 3.95%
Equity Weight 71.95%
Equity Cost 8.35%
WACC 7.12%
Leverage 38.99%

11. Quality Control: Neste Oyj passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Rubis

A-Score: 7.1/10

Value: 8.2

Growth: 5.6

Quality: 4.8

Yield: 9.4

Momentum: 7.5

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Subsea 7

A-Score: 6.2/10

Value: 6.6

Growth: 6.9

Quality: 4.8

Yield: 5.6

Momentum: 6.5

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
DCC

A-Score: 5.3/10

Value: 6.1

Growth: 3.8

Quality: 3.3

Yield: 6.2

Momentum: 3.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
IRPC

A-Score: 4.7/10

Value: 7.8

Growth: 4.7

Quality: 2.8

Yield: 3.3

Momentum: 3.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Esso

A-Score: 4.0/10

Value: 8.8

Growth: 5.2

Quality: 2.0

Yield: 5.6

Momentum: 1.0

Volatility: 1.3

1-Year Total Return ->

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Stock-Card
Neste

A-Score: 3.5/10

Value: 4.8

Growth: 3.2

Quality: 1.2

Yield: 5.6

Momentum: 4.0

Volatility: 2.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

18.3$

Current Price

18.3$

Potential

-0.00%

Expected Cash-Flows