contentSlug

type

ContentSlug_ContentQuery

slug

ContentPageContentQuery

content

trendingContent

query ContentSlug_ContentQuery(
  $contentSlug: String!
  $type: [ContentType!]
) {
  ...ContentPageContentQuery_13QmVO
}

fragment CompanyDetails_Content on Content {
  __isContent: __typename
  companies {
    name
    description
    pageUrl
    id
  }
}

fragment ContentBasicInfo on Content {
  __isContent: __typename
  id
  type
  title
  lang
  companies {
    viewerIsFollowing
    id
    name
    pageUrl
  }
  tags {
    viewerIsFollowing
    id
    name
    pageUrl
  }
  ...PublishingDetails
  ...Reactions
}

fragment ContentMetadata on Content {
  __isContent: __typename
  type
  title
  lang
  pageUrl
  alternatePageUrls: translations {
    __typename
    pageUrl
    lang
  }
  imgUrl
  description
  ... on Video {
    liveTime
    videoUrl
  }
  ... on Webcast {
    liveTime
    videoUrl
  }
}

fragment ContentPageContentQuery_13QmVO on Query {
  content(slug: $contentSlug, type: $type) {
    __typename
    id
    type
    title
    isPremium
    lang
    htmlBody
    summary
    companies {
      forum {
        latestPosts {
          ...ForumPosts
        }
      }
      name
      id
      viewerIsFollowing
      pageUrl
      defaultInstrument {
        isin
        id
        marketOpen
        marketClose
        marketplace {
          region
        }
        returns {
          total
        }
      }
    }
    tags {
      viewerIsFollowing
      id
      name
      pageUrl
    }
    createdAt
    ... on Video {
      liveTime
    }
    ... on Webcast {
      liveTime
    }
    slug
    ... on CompanyReport {
      reportUrl
      researchContentUrl
    }
    ... on ThirdPartyCompanyReport {
      reportUrl
    }
    ... on StockExchangeRelease {
      reportUrl
    }
    ...ContentBasicInfo
    ...ContentMetadata
    ...PriceAndRecommendation_Content
    ...CompanyDetails_Content
    ...ReportLink_Content
    ...KeyFigures_Content
  }
  ...TrendingContent_1jQ2Cn
}

fragment ForumPosts on ForumPost {
  text
  likesCount
  url
  author
  postedAt
  authorImgUrl
}

fragment KeyFigures_Content on Content {
  __isContent: __typename
  companies {
    defaultInstrument {
      estimateData {
        modelType
        reportingCurrency
      }
      snapshot {
        transaction {
          date
          actualized {
            year
            quarter
            revenue
            revenueGrowth
            ebitAdjusted
            ebitReported
            ebitda
            enterpriseValue
            epsAdjusted
            dividend
            dividendYield
            sharePrice
            nav
            navPerShare
            opexOfNav
            quarterlySharePrice
          }
          estimates {
            year
            quarter
            revenue
            revenueGrowth
            ebitAdjusted
            ebitReported
            ebitda
            enterpriseValue
            epsAdjusted
            dividend
            dividendYield
            sharePrice
            nav
            navPerShare
            opexOfNav
            quarterlySharePrice
          }
        }
      }
      id
    }
    id
  }
}

fragment PriceAndRecommendation_Content on Content {
  __isContent: __typename
  createdAt
  companies {
    name
    pageUrl
    defaultInstrument {
      priceData {
        tradeCurrency
      }
      snapshot {
        priceData {
          date
          lastPrice
          tradeCurrency
        }
        transaction {
          date
          recommendation
          targetPrice
        }
        prevTransaction {
          recommendation
        }
      }
      id
    }
    id
  }
}

fragment PublishingDetails on Content {
  __isContent: __typename
  createdAt
  publishers {
    name
    imgUrl
  }
  authors {
    __typename
    id
    name
    slug
    imgUrl
    jobTitle
  }
  ... on Video {
    liveTime
  }
  ... on Webcast {
    liveTime
  }
}

fragment Reactions on Content {
  __isContent: __typename
  id
  reactionGroups {
    reactionType
    reactionsCount
    viewerReacted
  }
}

fragment ReportLink_Content on Content {
  __isContent: __typename
  type
  isPremium
  ... on CompanyReport {
    reportUrl
  }
  ... on ThirdPartyCompanyReport {
    reportUrl
  }
  ... on StockExchangeRelease {
    reportUrl
  }
}

fragment TrendingContent_1jQ2Cn on Query {
  trendingContent(type: ARTICLE) {
    __typename
    id
    title
    lang
    pageUrl
    createdAt
    type
    imgUrl
    companies {
      squareLogoUrl
      name
      id
    }
    authors {
      __typename
      imgUrl
      id
    }
    publishers {
      imgUrl
    }
  }
}


__typename

title

isPremium

lang

htmlBody

summary

companies

createdAt

publishers

authors

reactionGroups

pageUrl

translations

imgUrl

description

Co. Head of Research

Petri Gostowski

Neste produces transport fuel and renewable fuels. Today, the largest operations and extraction are held in the Nordic market, where the company is active in the entire value chain, from extraction to delivery to port depots. In addition, the opportunity is given for direct sales where customers can pick up fuel at selected stations. The largest market is in the Nordic region, and the company is headquartered in Espoo, Finland.

According to OP: For Neste, the tightening of the mandate is very good news through the Martinez joint venture. Martinez produces about 20% of Neste’s renewable product sales volumes, meaning that the increase in RIN prices resulting from the tightening of the mandate clearly supports Neste’s sales margin from the United States. The market has already clearly anticipated this development, and recent spot margin levels have been over $500 per tonne compared to last year’s levels of about $100. The new mandate strengthens our view that margin levels must remain strong to achieve sufficient production to meet the significantly increased mandate.

There’s something fishy there when only 9 analysts are visible. No one is negative, but Inderes, for example, has a “reduce” recommendation. Neste is a relative winner, but many analysts have made some rather amusing moves there.  For example, Goldman Sachs previously had a TP (Target Price) of €23 and a “buy” rating. The target has been slightly raised, but after the share price increase, it’s a neutral recommendation. Sounds logical.  But it would be interesting to see how Barclays, for instance, justifies a target price change from €17 to €32   Forecasts have been pulled up significantly. EBITDA for this year has been raised by a billion, and for next year, it’s +400 MEUR compared to previous estimates.  So much money is being poured into investments that the elevated earnings level comes in handy. It keeps the balance sheet healthy, and the increased operating margin will contribute nicely to earnings and EPS in 2026, 2027, and 2028.

Kauppalehti has published a critical article regarding the state aid received by Neste and the ecological unsustainability of PFAD, a byproduct of palm oil. As an alternative, it proposes that the state fund biogas infrastructure to reduce heavy transport emissions to target levels. The first argument is that Neste’s dividend is financed by taxpayers’ money and the state does not get its investment back. Neste’s tax breaks amount to 150-200 million euros annually, and Neste pays about 153 million euros in dividends, of which the state receives a 68 million euro slice. Even when Neste’s corporate tax is included, it is nowhere near enough to cover the state subsidies. Personally, I do not consider this argument to be very strong, as Neste’s normalized profit far exceeds the financial support received from the state – in other words, Neste’s business is not dependent on tax breaks. Secondly, a comparison between dividends and state subsidies would require some justification, which is not provided in the article. If tax breaks are problematic in some way, they are so regardless of whether the company pays dividends or not. If one wanted to assess the profitability of state investments, indirect tax effects should also be considered. I quickly calculated that Neste’s employees working in Finland pay over 40 million euros in taxes on their salaries annually. The second argument concerns Neste’s use of PFAD, which mainly comes from Indonesia and Malaysia, where millions of hectares of forest have been cleared for palm oil production in the last ten years. The logging is not sustainable, supervision is not effective, and the economic significance of PFAD exacerbates the problems associated with palm oil. In my opinion, this is a problem that Neste must solve by the early 2030s. The article is behind a paywall:                   Tärkeimmät talousuutiset | Kauppalehti – 29 Mar 26              Nesteen osingot eivät ole sinun    Valtion Neste-tuet ylittävät osinkotuotot moninkertaisesti, kirjoittaa toimittaja Mikael Vehkaoja.                             …but fortunately, the article was originally published without a paywall:                   Tärkeimmät talousuutiset | Kauppalehti – 29 Mar 26              Nesteen osingot eivät ole sinun    Valtion Neste-tuet ylittävät osinkotuotot moninkertaisesti, kirjoittaa toimittaja Mikael Vehkaoja.

Neste’s guidance is quite vague…  I’m still wondering if the big planned maintenance shutdown in Porvoo in 2026 is absolutely necessary in its planned scope…? Now is the time to strike while the iron is hot.

Neste has never precisely stated what that price is, but it is most likely the total price, including the value of all subsidies. PTC calculated for the equivalent average raw material value. However, Valero also publishes a theoretical margin, which one can calculate oneself; it has risen to approximately $600/t. According to Bloomberg, in California, it is as high as $740/t for pure UCO-based (Used Cooking Oil) renewable diesel:  But, of course, the corresponding margin in Europe on Friday was $1,746/t.

@Homeros Hmm, somehow I remembered that the curve on Neste’s website was some kind of margin or index, but isn’t that the actual market price? But does it include PTC support and RIN certificates? Looking at the picture, one gallon of UCO would now be $8. If you use a factor of 0.78 kg/l, one ton takes 338 gallons, making the US-ton price $2700. That’s pretty much the same as the European price: $2800. Perhaps that curve is an index that takes into account the PTC and RIN certificates, because they can’t come on top of that for the refiner/producer anymore, can they?

Neste

The Q3 figures reported by Neste were well ahead of our expectations, reflecting which we raised our estimates for the current year. However, our focus is on earnings growth in the coming years, driven by volume growth in Renewable Products. In this respect, the outlook for next year is very cloudy due to several variables. In the longer term, however, we are confident that rising sales volumes from investments in Renewable Products will drive earnings growth, even if margins come under pressure from current peak levels.

<p>The Q3 figures reported by Neste were well ahead of our expectations, reflecting which we raised our estimates for the current year. However, our focus is on earnings growth in the coming years, driven by volume growth in Renewable Products. In this respect, the outlook for next year is very cloudy due to several variables. In the longer term, however, we are confident that rising sales volumes from investments in Renewable Products will drive earnings growth, even if margins come under pressure from current peak levels.</p> 

	2022	23e	24e
Revenue	25,707.4	21,931.1	23,569.8
growth-%	69.7 %	-14.7 %	7.5 %
EBIT (adj.)	2,898.0	2,641.5	2,086.8
EBIT-% (adj.)	11.3 %	12.0 %	8.9 %
EPS (adj.)	3.02	2.90	2.13
Dividend	1.52	1.10	1.15
Dividend %	3.5 %	4.1 %	4.3 %
P/E (adj.)	14.3	9.4	12.7
EV/EBITDA	11.3	8.5	7.6

Neste: Into the unknown

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Key Estimate Figures26.10.2023

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