Original-Research: Verbio SE (von NuWays AG): BUY
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Original-Research: Verbio SE - from NuWays AG
27.10.2026 / 09:00 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
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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
E20: A potential catalyst for ethanol demand
Germany and France are considering higher biofuel blends, with German
Transport Minister Steffen Bilger citing E20 petrol, containing up to 20%
ethanol, compared with up to 10% in the E10 blend, as a potential option.
The initiative follows the two countries' proposal to ease the EU's 2035 CO
reduction target for new cars from 100% to 90%, allowing combustion-engine
vehicles to remain on sale beyond 2035. While no formal E20 proposal or
timetable has been announced, political momentum could pave the way for an
initial rollout from 2027.
The demand opportunity could be significant. The EU consumed c. 5.0mt of
fuel ethanol in 2025, while producing c. 4.5mt. An increase in ethanol
blending towards 20% could substantially increase demand: a full transition
from a 10% to a 20% blend would require an illustrative c. 5.0mt of
additional ethanol p.a., assuming the current consumption base corresponds
to a 10% blend. The theoretical increase could be higher where E20 replaces
lower blends such as E5. Actual volumes will depend on the blends replaced,
vehicle compatibility and adoption. Higher demand could support European
ethanol prices and margins, although the impact will also depend on imports.
Higher biofuel blends could also help meet rising GHG reduction targets. In
January, the German Bioenergy Association (BBE) argued that higher physical
blends, including an increase from B7 to B10 in diesel and from E10 to E20
in petrol, would be needed to meet increasingly ambitious targets under
Germany's implementation of RED III. This was before Germany adopted an even
steeper trajectory, with the GHG reduction obligation rising from 12% in
2026 to 17.5% in 2027. While higher blending could increase the supply of
eligible GHG savings, it would not necessarily lead to lower quota prices,
given the simultaneous increase in compliance demand. The contribution of
crop-based biofuels to Germany's GHG obligation is capped at 4.9% of the
relevant fuel energy base; other options include waste- and residue-based
biofuels.
Higher ethanol blending would increase demand in a European market already
reliant on imports. With its European production capacity already running at
high utilisation, VERBIO could benefit from higher ethanol spreads or
through international trading, potentially selling its US ethanol production
in Europe. Based on European ethanol production of c. 334kt p.a. at 91%
utilisation, a EUR 100/t increase in margins would add c. EUR 33m to annual
EBITDA, or c. 15% of our FY26/27 estimate and c. 9% of our adjusted
medium-term estimate, all else being equal. For context, we expect European
ethanol spreads of c. EUR 230/t in Q1 FY26/27, compared with c. EUR 380/t in Q4
FY25/26, illustrating their volatility. The EUR 100/t increase is an
illustrative sensitivity, not an estimate of the impact of E20. Our current
estimates assume a medium- to long-term ethanol margin of EUR 160/t, versus c.
EUR 200/t expected until year-end. We maintain our estimates and EUR 41 price
target, based on the average FY27/28-FY28/29 FCF yield, pending further
details.
The next catalyst will be the Q1'26/27 results on 12 November. We expect
EBITDA 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. The expected
strong start supports our FY26/27 estimates, with potential upside from
higher GHG quota prices or a prolonged period of elevated biodiesel spreads.
For further details, please see our Q1 preview.
You can download the research here:
https://nwr.eqs-cockpit.com/fncls2.ssx?fn=redirect&u=4310fb7b6314dd867deddbffc87870a9
For additional information visit our website:
https://www.nuways-ag.com/research
Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss
bestimmter Börsengeschäfte.
Offenlegung möglicher Interessenkonflikte nach § 85 WpHG beim oben
analysierten Unternehmen befindet sich in der vollständigen Analyse.
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2422662 27.10.2026 CET/CEST
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