Barclays upgrades Shell to 'equalweight'

The bank said that in presenting a new financial framework this week, Shell has addressed its key concern, hence the upgrade.

"The new framework sets clear priorities for dividend growth, debt reduction, additional shareholder returns and further growth capex," it said. "On our own numbers we expect Shell to hit its new target net debt level in at the end of 2021 with the potential for $2-6bn (2-7%) extra returns to shareholders per year beyond this."

Barclays also noted news that Shell’s business model will be restructured into three core areas: upstream, transition businesses and growth businesses.

"This framework aligns with our own approach and should help demonstrate the real strengths that Shell has in a lower carbon world," it said.

"We believe there is more to come from Shell strategically, but it is the combination of the establishment of a financial framework together with the potential cash generation we see that leads us to lift our rating to equalweight."

Barclays left its price target on Shell unchanged at 1,500p.