RBC upgrades Shell to 'outperform'
RBC Capital Markets upgraded Royal Dutch Shell to ‘outperform’ from ‘sector perform’ and raised the price target to 2,250p from 2,125p.
FTSE 100
8,284.91
17:09 26/09/24
FTSE 350
4,575.40
17:00 26/09/24
FTSE All-Share
4,531.55
17:14 26/09/24
Oil & Gas Producers
7,726.22
17:00 26/09/24
Shell 'A'
1,895.20p
17:05 28/01/22
It noted that Shell is now the biggest underperformer in the sector year to date, and down 16% since announcing the BG Group acquisition in April, to levels not seen since 2010.
It said that with greater exposure to liquefied natural gas, coupled with pro-forma gearing above 20%, the deal with BG effectively increases Shell’s near-term risk profile.
RBC said that while this appears to have unsettled some, the recent share price weakness is overdone, and Shell should re-rate as the deal nears completion.
“We think the current share price underappreciates both BG’s core asset quality, and Shell’s abilities to extract additional value from its enlarged portfolio,” it said.
It added that Shell’s 6.5% dividend yield is attractive.
At 14:44, Shell shares were up 0.5% at 1,881.94p.