Shell: Berenberg upgrades the stock to 'buy'
(CercleFinance.com) - Berenberg analysts have upgraded their rating on Royal Dutch Shell shares from "hold" to "buy" after the oil giant reported a "solid set" of third-quarter results last month.
In a note to clients, the German broker noted that the company's cash generation rose substantially sequentially, generating nine billion dollars of operating cash flow over the quarter and reducing its net debt by 4.4 billion dollars.
Berenberg also pointed out that the group increased its quarterly dividend by 4%, with Shell laying out the roadmap to material share buybacks, likely from 2022.
"The stock has fallen about 50% this year, and while the environment remains very challenging in the near term, Shell has adapted to a low price environment, leaving an increasingly attractive risk/reward skew for the stock", the broker wrote.
Berenberg is maintaining its target price of 1,450 pence for Shell B shares, while trimming its target price for Shell A shares from 17 euros to 16 euros.
Copyright (c) 2020 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.
In a note to clients, the German broker noted that the company's cash generation rose substantially sequentially, generating nine billion dollars of operating cash flow over the quarter and reducing its net debt by 4.4 billion dollars.
Berenberg also pointed out that the group increased its quarterly dividend by 4%, with Shell laying out the roadmap to material share buybacks, likely from 2022.
"The stock has fallen about 50% this year, and while the environment remains very challenging in the near term, Shell has adapted to a low price environment, leaving an increasingly attractive risk/reward skew for the stock", the broker wrote.
Berenberg is maintaining its target price of 1,450 pence for Shell B shares, while trimming its target price for Shell A shares from 17 euros to 16 euros.
Copyright (c) 2020 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.