Shell gains as Charles Stanley reiterates 'accumulate' rating

Charles Stanley reiterated its ‘accumulate’ rating on Royal Dutch Shell on Wednesday after the company said it expects increased synergies from its £40bn deal to buy BG.

Shell on Tuesday said its estimates of pre-tax synergies from the deal had risen 40% to $3.5bn by 2018.

The group also reiterated that the proposed deal with BG Group should boost cash flow, reduce debt, and improve Shell’s capacity to pay dividends and deliver share buybacks.

"After disappointing third quarter results, the share price has underperformed the peer group and a valuation discount appears to have been created," said Charles Stanley analyst Tony Shepard.

"With the high dividend yield and potential long-term growth for the combined Group, we maintain our ‘accumulate’ recommendation."

Shares rose 1.17% to 1,778p at 1336 GMT.