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Wondering whether Neste Oyj at €28.60 still offers value after a big run, or if you might be late to the story.
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The stock is down 5.6% over the past week, up 11.4% over the past month, up 43.6% year to date, and has returned 201.6% over the past year. Over longer 3 year and 5 year periods, it shows declines of 16.8% and 34.4% respectively.
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Recent news coverage has focused on investor interest in energy transition themes and the role of companies like Neste Oyj in that space. Commentary has also highlighted how sharp share price moves can reshape expectations around risk and future opportunities, which helps explain the mixed shorter and longer term return profile.
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Neste Oyj currently has a value score of 2/6. Next comes a closer look at how different valuation methods assess the stock today and how one broader framework at the end of the article can help you interpret those results more clearly.
Neste Oyj scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown .
Approach 1: Neste Oyj Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow model takes estimates of a company's future cash flows and discounts them back to today, aiming to translate those future € amounts into a single present value per share.
For Neste Oyj, the latest twelve month free cash flow is about €1.30b. Analyst estimates and subsequent extrapolations point to projected free cash flow of around €1.87b in 2030, based on a 2 Stage Free Cash Flow to Equity model that combines analyst inputs for earlier years with extended projections generated by Simply Wall St.
Using these cash flow projections and discounting them back to today gives an estimated intrinsic value of €45.76 per share. Against the current share price of €28.60, this implies a discount of roughly 37.5%, which indicates that the stock is trading below this model's estimate of its underlying value.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Neste Oyj is undervalued by 37.5%. Track this in your watchlist or portfolio , or discover 227 more high quality undervalued stocks .
Approach 2: Neste Oyj Price vs Earnings
For profitable companies, the P/E ratio is a useful way to check what you are paying for each euro of earnings, because it ties the share price directly to the company's current profit base. Higher growth expectations and lower perceived risk usually justify a higher P/E, while slower growth or higher risk typically call for a lower, more conservative multiple.
Neste Oyj currently trades on a P/E of 30.65x. This sits above the Oil and Gas industry average P/E of 14.77x and also above the peer group average of 25.36x, which suggests the market is placing a relatively higher value on its earnings compared with those reference points.
Simply Wall St's "Fair Ratio" is a proprietary estimate of what a suitable P/E might be after factoring in elements such as the company's earnings growth profile, industry, profit margins, market cap and key risks. This Fair Ratio can be more informative than a simple peer or industry comparison because it adjusts for these company specific drivers rather than assuming all stocks deserve similar multiples.
At present, there is no Fair Ratio available for Neste Oyj in the data provided, so it is not possible to draw a firm conclusion on whether the current P/E points to the stock being overvalued, undervalued, or about right.
Result: ABOUT RIGHT
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Upgrade Your Decision Making: Choose your Neste Oyj Narrative
Earlier it was mentioned that there is an even better way to understand valuation. Narratives let you attach a clear story about Neste Oyj to the numbers by linking your view of its future revenue, earnings and margins to a forecast and then to a Fair Value that can be compared with today's price. All of this is within Simply Wall St's Community page, where these Narratives update automatically as fresh news or earnings arrive. For example, one investor might build a more cautious Neste Oyj view around a Fair Value close to €14.38, while another leans on a more optimistic view closer to €26.00. This gives you a simple, side by side anchor when deciding whether the current share price of €28.60 looks rich or conservative for your own decision making.
Do you think there's more to the story for Neste Oyj? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include NESTE.HE .
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
