Original-Research: Verbio SE (von NuWays AG): BUY

Original-Research: Verbio SE - from NuWays AG

21.10.2026 / 09:00 CET/CEST

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Classification of NuWays AG to Verbio SE

Company Name: Verbio SE

ISIN: DE000A0JL9W6

Reason for the research: Update

Recommendation: BUY

Target price: EUR 41

Target price on sight of: 12 months

Last rating change:

Analyst: Jorge Gonzalez

Q1 preview: Strong start supports FY26/27 outlook

VERBIO is set for a strong start to FY26/27, with Q1'26/27 EBITDA expected

to quadruple yoy to EUR 61.5m (eNuW), supported by stronger European biodiesel

and ethanol spreads, higher utilisation as Nevada continues to ramp up, and

significantly higher German GHG quota prices. Nevertheless, EBITDA is seen

c. 11% below Q4'25/26, adjusted for the EUR 19m reversal of GHG quota

inventory impairments. This mainly reflects normalising European ethanol

spreads (eNuW: c. EUR 230/t vs c. EUR 380/t in Q4). While GHG quota market

prices have continued to rise qoq, we expect a higher share of deliveries

under fixed-price bilateral contracts rather than spot sales, keeping

realised prices broadly stable qoq.

Biodiesel EBITDA is expected to increase 60% yoy to EUR 36.1m, with broadly

equal contributions to growth from higher market spreads (+70% yoy to EUR

184/t, eNuW) and higher GHG quota prices (eNuW: EUR 430/t CO, up c. EUR 280/t

yoy). Biodiesel spreads have recovered sharply after approaching break-even

in April-June, when vegetable oil prices initially reacted more strongly

than biodiesel prices to expectations of higher renewable fuel demand

following regulatory changes in Europe and the US (Germany's RED III

implementation and higher US renewable fuel blending obligations for 2026-27

under the RFS). Market spreads are expected to improve further sequentially

in Q2 to above EUR 250/t (eNuW), although the timing of feedstock purchases

and biodiesel sales may affect realised margins.

Bioethanol/Biomethane EBITDA is seen improving by c. EUR 35m yoy to EUR 25.8m,

primarily driven by higher GHG quota prices (c. EUR 30m contribution to yoy

growth, eNuW), alongside slightly stronger market spreads and increasing

biomethane volumes in Nevada. Against Q4, EBITDA is expected to decline c.

28%, excluding the inventory impairment reversal, mainly reflecting the

aforementioned normalisation of European ethanol spreads. Other activities

and consolidation are expected to contribute EUR -0.4m to group EBITDA.

Net income is expected to recover to EUR 25.0m (eNuW, vs EUR -4m in Q1'25/26),

assuming an effective tax rate of c. 43%, elevated by US losses for which no

tax benefit is recognised. Improving US profitability should gradually lower

the group's effective tax rate over the course of FY26/27.

The anticipated strong start to the year underpins our FY26/27 estimates,

with upside potential from higher-than-assumed GHG quota prices or a

prolonged period of elevated biodiesel spreads. Beyond the current year, the

recent CMD reinforced our investment case, highlighting illustrative

mid-cycle EBITDA of c. EUR 300m, progress in renewable chemicals and

additional upside from US tax incentives. Lower capex and the planned

monetisation of accumulated GHG quotas (eNuW: EUR 220m in cash proceeds)

should further support cash generation. We reiterate BUY and our EUR 41 price

target, based on the average FY27/28-FY28/29 FCF yield. -Q1 estimates table

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