Neste shares gain as banks raise targets on fuel price surge

Tuesday 17 March 2026 - 14:50

By: Dakir Madiha

Neste shares gain as banks raise targets on fuel price surge

Barclays and Morgan Stanley have upgraded their outlook on Finnish renewable fuels producer Neste, citing improved margins driven by rising fuel prices linked to geopolitical tensions involving Iran.

Barclays raised its rating on the company to overweight and set a price target of €32, while Morgan Stanley increased its target to €28.50 from €25 and reaffirmed its overweight recommendation. The upgrades reflect a broader shift in analyst sentiment as energy market conditions improve.

The bullish outlook follows a sharp rise in diesel and renewable fuel margins. Disruptions tied to the conflict in the Middle East have tightened supply, pushing European diesel prices from about $700 per ton before the escalation to around $1,100. Renewable diesel prices have also increased by roughly $150 per ton.

Analysts said these developments significantly enhance Neste’s earnings potential. The company has indicated that a $50 per ton change in renewable fuel margins can impact operating profit by about $280 million. Around 60 percent of its 2026 volumes are already secured through forward contracts at higher premiums than the previous year.

Other financial institutions have also revised their outlook. RBC Capital Markets recently upgraded the stock to outperform with a €30 target, while Goldman Sachs moved to a buy rating earlier this year, citing stronger market conditions for renewable diesel.

Beyond the immediate geopolitical impact, analysts pointed to structural demand drivers. European policy developments, including Germany’s implementation of the EU RED3 directive, are expected to increase demand for renewable diesel. In the United States, a pending decision on renewable fuel standards could further support margins.

Neste’s shares have risen about 40 percent since the start of the year on the Helsinki exchange, reflecting improved investor confidence in the company’s outlook.