Berenberg on Shell stays at 'buy' on Shell after 'strong' Q2 numbers

The day before, the oil major delivered a "strong" set of results and cash flow numbers, on the back of higher commodity prices , recovering retail sales and strong chemical margins.

Indeed, its $14.2bn of cash flow was second-highest ever recorded.

Hence Shell's decision to raise its dividend payout and restart share buybacks.

Furthermore, Berenberg expected the company's Integrated Gas division trading results to bounce back in the second half on continued strength in the market environment.

Looking out to the medium-term, it was possible that the company would need to increase its capital expenditures in order to maintain its guidance for 4% growth in its dividend yield, the broker's analysts conceded.

Nonetheless, for now "the improved dividend yield, rising earnings and strong FCF looks attractive, with the stock trading on 8x 2021E P/E. We reiterate our Buy rating."

Berenberg hiked its target price for Shell's shares from 1,570.0p to 1,720.0p.