Broker tips: Royal Dutch Shell, Travis Perkins, Fresnillo

They also expected the company's shares to outperform and bumped up their target price from 1,630.0p to 1,815.0p.

Brent crude oil prices had risen from $61.0 a barrel in the first quarter to $69.0 over the three months to June, alongside strengthening natural gas prices.

Yet the company's share price had trailed the company's earnings outlook "considerably" - although they expected that would change.

The reason in their opinion for that disconnect was the uncertainty that investors faced around the energy transition, on top of the sector's "mixed at best" track record over the past decade when it came to capital allocation.

Hence, investors were relying on just the Dividend Discount Model to value firms in the sector, "giving little credit for cash flow retained within companies."

JPMorgan Cazenove upgraded Travis Perkins on Monday to ‘overweight’ from ‘neutral’ and hiked the price target to 2,000p from 1,600p.

The bank said that while the shares are up 31% year-to-date, they have only largely recovered the poor performance of last year, underperforming the European Merchants/Distribution/Retail names.

"Meanwhile, the group has simplified its structure, leading to significantly improved balance sheet and returns profile which, in our view, is not reflected in the valuation yet," it said.

JPM said it was upgrading the shares after resetting its forecasts following the simplification of the group and argued that there is "considerable" scope for a re-rating.

RBC Capital Markets upgraded its stance on shares of Fresnillo to ‘outperform’ from ‘sector perform’ as it argued that after weak first-quarter silver production and lower guidance, market expectations "seem to have been largely reset".

The bank said the precious metals miner is now set to deliver a growth phase, with the ramp-up of the Juanicipio project improving free cash flow.

"With the shares underperforming peers and trading at the low end of its historical multiple ple range, we upgrade our recommendation," RBC said.