VBK: Future Earnings Momentum Will Rely On Stable Biofuel Production Volumes

Analysts have raised Verbio's fair value estimate from EUR 16.80 to EUR 18.00, citing sharply improved Q1 EBITDA, solid European plant utilization, and the ongoing ramp up in the U.S. as key drivers of the higher target.

Analyst Commentary

Bullish analysts highlight that Verbio's recent operational performance supports a structurally higher valuation range than previously assumed. The latest price target revision reflects increased confidence in the durability of earnings momentum, particularly as the company executes on its growth plans across key markets.

They point to the sharp improvement in Q1 EBITDA as evidence that Verbio is effectively leveraging its asset base, with strong plant utilization in Europe and a successful ramp up in the U.S. underpinning higher profitability. Expectations for further EBITDA gains in Q2 reinforce the view that current margins may prove more resilient than earlier forecasts indicated.

As a result, bullish analysts view the recent price target increase as part of a broader re-rating of the shares, driven by better visibility on near term earnings and a more constructive outlook on medium term growth.

Bullish Takeaways

• Upward revisions to Verbio's price target reflect growing conviction that recent EBITDA strength is sustainable, supporting a higher fair value range for the shares.
• Improved plant utilization in Europe and the ongoing ramp in the U.S. are viewed as clear proof points of strong execution, reducing perceived operational risk.
• Expectations for further EBITDA improvement in Q2 enhance visibility on near term earnings growth, bolstering confidence in Verbio's medium term growth trajectory.
• Bullish analysts note that as Verbio continues to deliver on volume and margin expansion, the market may respond by assigning a stronger valuation multiple over time.

What's in the News

• Verbio reported fourth quarter 2024 to 2025 biodiesel production of 160,146 tons, underscoring stable output levels across its core biofuel segment (Key Developments).
• Fourth quarter 2024 to 2025 bioethanol production reached 162,596 tons, highlighting continued strong utilization of Verbio's ethanol capacity (Key Developments).
• Fourth quarter 2024 to 2025 biomethane production came in at 325,005 MWh, reflecting the growing contribution of green gas to Verbio's overall portfolio (Key Developments).
• In the first quarter of 2025 to 2026, biodiesel production increased to 166,885 tons from 161,833 tons a year earlier, signaling year over year growth in renewable diesel volumes (Key Developments).
• First quarter 2025 to 2026 biomethane production rose to 336,051 MWh from 271,203 MWh a year ago, marking a substantial expansion of Verbio's biomethane output (Key Developments).

Valuation Changes

• The fair value estimate has risen slightly from €16.80 to €18.00 per share, reflecting a modest uplift in the analysts' central valuation range.
• The discount rate has fallen slightly from 5.24 percent to 4.93 percent, implying a lower perceived risk profile and reduced cost of capital in the updated model.
• The revenue growth assumption has declined moderately from about 18.96 percent to 14.80 percent, indicating more conservative expectations for top-line expansion.
• The net profit margin assumption has fallen significantly from roughly 7.14 percent to 3.51 percent, pointing to a more cautious view on future profitability.
• The future P/E multiple has risen sharply from about 7.1x to 19.3x, suggesting that a larger share of the valuation now depends on higher earnings multiples rather than margin or growth upgrades.