Shell: Jefferies says stock has about 20% upside
(CercleFinance.com) - Broker Jefferies this morning confirms its target price on the Royal Dutch Shell share (the A share listed in London) after the Anglo-Dutch oil and gas major published its quarterly results yesterday.
At 2,950 pence, the broker's target price suggests upside potential of around 20%.
Analysts hail 'very strong quarterly results, as in adjusted terms, the group's net income exceeded the consensus by 17%. The same applies for the generation of adjusted operating cash flow, which reached 12.1 billion dollars, while Jefferies was expecting just 10.3 billion dollars. As a result, free cash flow more than covers dividends (16.1 billion dollars, with a quarterly coupon of 0.47 dollar per share) and share repurchases (6.8 billion dollars).
"RDS has made significant efforts to high-grade its portfolio since completing the BG acquisition in 2016, which is evident in margin progression," Jefferies adds.
Finally, analysts say that the CMD scheduled for 4 June in London could serve as a catalyst for the share, as "Management is confident in the robustness of the portfolio for the next decade," Jefferies says.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
At 2,950 pence, the broker's target price suggests upside potential of around 20%.
Analysts hail 'very strong quarterly results, as in adjusted terms, the group's net income exceeded the consensus by 17%. The same applies for the generation of adjusted operating cash flow, which reached 12.1 billion dollars, while Jefferies was expecting just 10.3 billion dollars. As a result, free cash flow more than covers dividends (16.1 billion dollars, with a quarterly coupon of 0.47 dollar per share) and share repurchases (6.8 billion dollars).
"RDS has made significant efforts to high-grade its portfolio since completing the BG acquisition in 2016, which is evident in margin progression," Jefferies adds.
Finally, analysts say that the CMD scheduled for 4 June in London could serve as a catalyst for the share, as "Management is confident in the robustness of the portfolio for the next decade," Jefferies says.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.