Shell: Jefferies says share offers 'buying opportunity'
(CercleFinance.com) - The broker Jefferies confirms its buy rating on the Anglo-Dutch oil major Royal Dutch Shell, maintining its target price of 2,900 pence for its A shares listed in London.
This suggests upside potential of 20%.
Analysts react to the disappointing quarterly profit (30% under expectations, in adjusted data) that the oil and gas group published yesterday, which moreover was sanctioned by the share falling by close to 5%, with this fall continuing this morning. The group also disappointed in terms of generation of operational cash. In short, this is "a bad quarter" in particular resulting from the weak gas and petrochemical markets, the broker says in its note.
However, Jefferies argues that this is just a bad transitional phase: analysts are convinced that Shell is capable of meeting its targets, including free cash flow of at least 28 billion dollars by 2020. The broker says, "We believe this is an over-reaction and represents a buying opportunity".
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