Shares of Verbio SE surged as much as 7.4% to €27.50 on October 16 after Jefferies analyst Constantin Hesse upgraded the German biofuel producer from Hold to Buy and lifted his price target from €36 to €42 — citing a "deutlich optimistischer" (significantly more optimistic) outlook on profitability, with biodiesel margins running higher than expected and a tightening market poised to sustain them.

  • A Year of Dramatic Recovery Sets the Stage. Verbio posted group EBITDA of €193.9 million for the fiscal year ended June 2026, while Q4 EBITDA alone reached €88.2 million — compared with a loss of €8 million in the year-ago quarter.

Operating cash flow climbed to €164.6 million and free cash flow hit €78 million. That's a stark turnaround from a dismal FY 2024/25, when EBITDA was just €14.2 million. The recovery gives Jefferies a real earnings base — not just a hope — on which to build its bullish case.

  • A Heavy Spending Cycle Is Ending, and That Changes the Math. Verbio has nearly completed a major investment program, which shifts the focus toward generating returns — essentially making money — from its existing biorefinery network instead of pouring cash into construction.

Net debt fell to €91.5 million and the equity ratio strengthened to 59.7%. Less spending and lower debt mean more of each euro in profit can flow to shareholders.

  • Management Is Guiding for Further Growth — With a Wide Range. Verbio expects EBITDA of €210–€250 million for FY 2026/27, up from €194 million last year.

Management flagged the greenhouse-gas (GHG) quota business as the biggest swing factor. That €40 million spread between the low and high end of the guide tells investors that earnings remain at the mercy of regulatory pricing and commodity spreads — exactly the volatility that kept Jefferies on the sidelines until now.

  • U.S. Policy Could Be an Unpriced Bonus. Verbio said new U.S. biofuel incentive rules could create significant upside for its American ethanol operations, but that benefit is not yet included in guidance.

A final U.S. ruling on tax credits for lower-carbon fuels, expected in November, could improve visibility for the company's North American contribution. If formalized, this represents a genuine catalyst not yet baked into the €42 target.

At €27.50, the stock still trades roughly 53% below Jefferies' new target. The gap reflects both opportunity and skepticism: biodiesel economics can shift quickly, and Verbio's own guidance range signals uncertainty. Investors buying here are betting the recovery is structural — not cyclical.