Neste (NTOIY) AI Stock Analysis

• Market Cap: $11.21B
• Dividend Yield: 3.13%
• Average Volume (3M): 1.24K
• Price to Earnings (P/E): 19.1
• Beta (1Y): 0.49
• Revenue Growth: -7.88%
• EPS Growth: -121.46%
• Country: US
• Employees: 5,408
• Sector: Energy
• Sector Strength: 62
• Industry: Oil & Gas Refining & Marketing
• EPS (TTM): -0.02
• Shares Outstanding: 1,538,422,000
• 10 Day Avg. Volume: 3,716
• 30 Day Avg. Volume: 1,238
• PEG Ratio: 0.05
• Price to Book (P/B): 2.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 13.34
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $6.25
• Price Target Upside: -13.19% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 61 Neutral
• Price Target: $7.00 ▼(-2.78%Downside)

Neste's overall stock score is driven primarily by its strong technical indicators, despite financial challenges and valuation concerns. While technical analysis suggests bullish momentum, financial performance and valuation highlight significant risks. The earnings call provided a mixed outlook, with strategic achievements balanced by operational challenges.

Positive Factors

Earnings

NESTE stock notched double-digit gains as Renewable Products (RP) margins posted its first q/q gain since 3Q23.

Financial Performance

NESTE was up >10% off earnings, outperforming peers and indices by a similar amount.

Negative Factors

Market Oversupply

NESTE was hesitant to endorse 1Q25 as a bottom in RP margins, noting global renewable fuels will remain oversupplied in 2025 and potentially into 2026, with a continued large amount of regulatory uncertainty.

Operational Challenges

4Q results were impacted by unplanned downtime across its portfolio, though all of its assets are now running.

Sales and Demand

SAF sales could be disappointing at 50% total 1MM tpa capacity due to industry oversupply, limiting the ability to capture expected higher margins.

Neste Business Overview & Revenue Model

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.

How the Company Makes Money

Neste makes money primarily through its refining and marketing operations. The company's revenue model is centered around the production and sale of renewable products such as Neste MY Renewable Diesel and Neste MY Sustainable Aviation Fuel, which are derived from renewable raw materials like waste and residues. Additionally, Neste generates revenue from its conventional oil refining business, which includes the production and sale of gasoline, diesel, and other oil products. The company also benefits from strategic partnerships with airlines, logistics companies, and municipalities seeking to reduce their carbon footprint by adopting sustainable fuels. Neste's focus on innovation and expanding its renewable product offerings helps it tap into the growing demand for cleaner energy solutions, further boosting its revenue streams.

Neste Financial Statement Overview

Summary

Neste is facing significant financial challenges with negative profitability margins and return on equity. However, the balance sheet remains stable, showing a balanced debt-to-equity ratio and a solid equity base. Operating cash flow is strong relative to net income, but free cash flow remains negative, indicating a need for better capital expenditure management.

Income Statement

Neste's income statement reflects significant challenges. The TTM shows a negative EBIT margin of -0.94% and a net profit margin of -1.42%, indicating operational inefficiencies and net losses. However, there is a slight revenue growth of 1.06% compared to the previous year, which shows some resilience in revenue generation despite the tough conditions.

Balance Sheet

The balance sheet reveals a moderate financial position with a debt-to-equity ratio of 0.77, indicating a balanced approach to leveraging. The equity ratio stands at 45.12%, reflecting a solid equity base. However, the negative return on equity of -4.08% in the TTM indicates the company is struggling to generate returns from its equity.

Cash Flow

Cash flow analysis shows mixed signals. While the operating cash flow to net income ratio is robust at -4.23, indicating strong cash flow generation relative to net income, the free cash flow remains negative, although it has improved compared to the previous year. The company must address its capital expenditure to improve free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	21.55B	20.64B	22.93B	25.71B	15.15B	11.74B
Gross Profit	3.50B	2.05B	3.66B	3.42B	2.81B	1.81B
EBITDA	3.26B	700.00M	2.58B	3.00B	2.62B	1.38B
Net Income	2.20B	-95.00M	1.43B	1.89B	1.77B	712.00M
Balance Sheet
Total Assets	8.56B	15.58B	15.98B	14.92B	12.42B	9.81B
Cash, Cash Equivalents and Short-Term Investments	1.29B	955.00M	1.58B	1.27B	1.72B	1.57B
Total Debt	1.37B	5.15B	4.07B	2.62B	1.76B	1.31B
Total Liabilities	3.63B	8.16B	7.52B	6.59B	5.43B	3.89B
Stockholders Equity	4.93B	7.42B	8.46B	8.32B	6.98B	5.92B
Cash Flow
Free Cash Flow	192.00M	-369.00M	849.00M	-546.00M	1.02B	1.29B
Operating Cash Flow	1.20B	1.18B	2.28B	1.20B	1.99B	2.06B
Investing Cash Flow	-1.27B	-1.50B	-1.53B	-1.59B	-1.48B	-1.04B
Financing Cash Flow	-86.00M	-314.00M	-441.00M	-37.00M	-377.00M	-961.00M

Neste Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7.20
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTOIY, the sentiment is Positive. The current price of 7.2 is above the 20-day moving average (MA) of 6.68, above the 50-day MA of 5.82, and above the 200-day MA of 6.28, indicating a bullish trend. The MACD of 0.43 indicates Negative momentum. The RSI at 71.62 is Negative, neither overbought nor oversold. The STOCH value of 83.55 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NTOIY.

Neste Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PSX	76 Outperform	$52.97B	29.65	6.48%	3.69%	-7.61%	-66.18%
SUN	71 Outperform	$8.05B	9.48	26.11%	6.81%	-3.59%	22.77%
MPC	68 Neutral	$55.28B	25.28	12.37%	2.02%	-6.39%	-64.50%
Sector *	68 Neutral	$15.27B	10.03	6.34%	5.16%	4.13%	-66.99%
DINO	66 Neutral	$8.46B	35.13	-1.49%	4.46%	-11.17%	-109.60%
VLO	66 Neutral	$46.56B	52.42	3.73%	3.04%	-8.44%	-85.95%
NTOIY	61 Neutral	$11.21B	19.07	-3.92%	3.13%	-7.88%	-121.46%