Neste (NESTE.HE): 2Q Misses Consensus - A Record Quarter but Don’t Capitalize Peak Earnings

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Neste (NESTE.HE): 2Q Misses Consensus - A Record Quarter but Don’t Capitalize Peak Earnings

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24 Jul 2026 03:39:42 ET │ 12 pages

Neste (NESTE.HE)

2Q Misses Consensus - A Record Quarter but Don't Capitalize Peak

Earnings

CITI'S TAKE Sell / High Risk

Price (23 Jul 26 18:30) €33.59 2Q26 earnings missed market expectations as a miss in Oil Products was

Target price €18.40 partially offset by stronger Renewable Products. As anticipated, the

strength in the macro backdrop delivered a record quarter for Neste, Expected share price return -45.2%

however, we do not believe peak earnings should be capitalised. In our Expected dividend yield 0.6%

view, the current enterprise value implies RP Sales Margins remains near Expected total return -44.6%

current levels for the next four years, despite consensus forecasts pointing Market Cap €25,838M

to margins roughly halving by 2028. Neste has re-rated sharply over the US$29,396M

past 12 months on improving earnings momentum. Yet, with the shares

trading at c. 11x trailing EV/DACF and limited evidence of a growth agenda

beyond the Rotterdam start-up in 2027, we continue to view the valuation

as demanding. Sell/High Risk. Kate O’SullivanAC

+44-20-7986-5704

kate.osullivan@citi.com2Q26 Summary — Adjusted net income of €0.77B is c.-2% below company-issued

consensus. The 2Q Renewable Products (RP) margin of $1,223/T is a record for Alastair R Syme

Neste (vs Citi 1,100$/T), driven by the flow-through of exceptionally strong middle- alastair.syme@citi.com

distillate prices from disruption in Russia and the Middle East. Oil Products however

missed consensus EBITDA (-17%) despite a margin beat of 25.8$/boe (consensus Oliver G Connor

24.4 $/boe), driven somewhat by lower volumes (-10% vs consensus). Tianhong Bi, CFA