Neste shares rose 2.5% after Goldman Sachs moved the stock from Neutral to Buy and lifted its price target from 2 to 32 to 40. The new target equates to roughly 25% upside from current levels, according to the brokers note.
Goldman Sachs pointed to a cluster of developments that have strengthened since July. The bank flagged rising geopolitical risks and greater concern about supply disruptions, noting that Russias diesel export ban has been extended until the end of September. It also highlighted what it described as broader regulatory support for renewable fuels across Europe - beyond Germany - and the removal of the overhang tied to US small refinery exemptions.
Despite these positive drivers, the firm acknowledged that Neste has meaningfully underperformed its peers. The stock has lagged European refiners by 25 percentage points year-to-date and by 20 percentage points over the past month, Goldman Sachs said.
The banks analysts revised their assumptions on volumes after Neste reported second quarter 2026 results, noting that their 2027 renewable sales volume expectations have moved lower. Nevertheless, Goldman Sachs said it expects stronger margins to more than offset the volume shortfall.
On the numbers, the investment banks volume forecasts remain about 5% below consensus. However, after adjusting estimates, Goldman Sachss 2027 EBITDA projection now stands at approximately 30% above consensus.
The upgrade and target increase framed by those forecasts are the primary drivers behind the intraday share gain. Market participants will be watching whether the factors cited by Goldman Sachs - geopolitical supply constraints, regulatory support for renewable fuels, and the US policy shift - continue to alter investor expectations for Neste relative to its European refining peers.
Detailed summary
Goldman Sachs upgraded Neste to Buy from Neutral and raised its price target to 40 from 32, lifting implied upside to roughly 25%. The brokerage cited elevated geopolitical and supply risks including Russias diesel export ban extended to the end of September, broader European regulatory support for renewable fuels beyond Germany, and the removal of the US small refinery exemptions overhang. While 2027 renewable sales volume expectations have been trimmed following Q2 2026 results, Goldman expects stronger margins to offset that decline and now projects 2027 EBITDA about 30% above consensus, even though its volume forecasts sit roughly 5% below consensus.