Neste Oil Oyj (NES1V), Finland’s only refiner, climbed the most in three weeks in Helsinki trading as Societe Generale SA recommended buying the stock, saying earnings will recover in the second half.
Neste Oil rose as much as 2.5 percent, the biggest intraday gain since May 16, and traded up 1.5 percent at 11.07 euros by 1:38 p.m. local time. The stock on June 7 touched its lowest price since January on concern maintenance halts will weigh on profit this quarter.
“This recent underperformance is mainly due to fears regarding second-quarter results,” Mehdi Ennebati, an analyst at Societe Generale in Paris, said today in a note, citing refinery shutdowns for maintenance. “The second quarter’s low performance from refining should be seen as a one-off.”
Neste Oil halted its diesel production line in Porvoo for eight weeks and cut gasoline output at the plant for three weeks in April. The maintenance dragged down profit estimates for the refining division, with SocGen projecting clean earnings before interest and tax of 35 million euros ($46 million) in the second quarter, compared with 49 million euros a year earlier.
Clean Ebit is adjusted for special, non-recurring items. Neste Oil is due to report second-quarter results on Aug. 1.
“In the second half, Neste Oil will again fully benefit from its high-complexity refineries and be able to deliver strong realized margins,” Ennebati said, increasing his rating on the Espoo-based company to buy from hold. Neste Oil’s renewable-fuel unit will also produce a “relatively good performance.”
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