Royal Dutch Shell 'A' (RDSA)

Sector:

Energy Producers

Index:

FTSE 100

971.80p
   
  • Change Today:
      23.40p
  • 52 Week High: 2,342.50
  • 52 Week Low: 928.00
  • Currency: UK Pounds
  • Shares Issued: 4,101.24m
  • Volume: 3,610,387
  • Market Cap: £39,856m
  • RiskGrade: 173

Barclays downgrades Shell, says performance lags peers

By Michele Maatouk

Date: Wednesday 26 Aug 2020

LONDON (ShareCast) - (Sharecast News) - Barclays downgraded Shell to 'underweight' from 'equalweight' on Wednesday, saying that while the company has the potential to deliver significant fresh cash flow in the long term, it screens as expensive relative to its near-term industrial performance.
"A strategy presentation in February 2021 may well act as a catalyst but is still five months away, and we see limited momentum until then," Barclays said, adding that BP is its preferred UK stock while Total remains its 'top pick' in Europe.

"Shell's industrial performance remains in the fourth quartile with the stock continuing to lag peers on both returns and growth into 2021," the bank said. "On ESG (Environmental, Social, Governance) metrics, the company screens better, helped by its bias towards gas, but this is not enough to offset the impact of weaker corporate metrics which are driving the industrial ranking lower."

It noted that Shell was one of the first to take action amid the weaker macroeconomic backdrop, choosing to cut its dividend by two-thirds. "We continue to see that as having been the right decision for the long term, but it also raised a number of strategic questions that remain.

"Industrially, the strategy remains unchanged - and our own forecasts project a material uplift in FCF in 2022 and 2023 - to by far the highest level of the sector. Yet the capital allocation strategy and how this FCF may be used does need further explanation to us."

In particular, Barclays said Shell's medium-term capex outlook remains a key uncertainty, as well as its willingness to do M&A, the speed of the transition to renewables and ultimately what the dividend profile will look like over time.

"These are important questions that we believe the company can and will address, but until those firm answers are provided we believe they are likely to act as an overhang on the shares."

Barclays kept its price target unchanged at 1,500p.

Email this article to a friend

or share it with one of these popular networks:


Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

Shell Market Data

Currency UK Pounds
Share Price 971.80p
Change Today 23.40p
% Change 2.47 %
52 Week High 2,342.50
52 Week Low 928.00
Volume 3,610,387
Shares Issued 4,101.24m
Market Cap £39,856m
RiskGrade 173

Shell Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
95.22% above the market average95.22% above the market average95.22% above the market average95.22% above the market average95.22% above the market average
13.04% above the sector average13.04% above the sector average13.04% above the sector average13.04% above the sector average13.04% above the sector average
Price Trend
88.55% below the market average88.55% below the market average88.55% below the market average88.55% below the market average88.55% below the market average
42.86% below the sector average42.86% below the sector average42.86% below the sector average42.86% below the sector average42.86% below the sector average
Income
88.27% above the market average88.27% above the market average88.27% above the market average88.27% above the market average88.27% above the market average
Sector averageSector averageSector averageSector averageSector average
Growth
30.33% above the market average30.33% above the market average30.33% above the market average30.33% above the market average30.33% above the market average
37.04% below the sector average37.04% below the sector average37.04% below the sector average37.04% below the sector average37.04% below the sector average

What The Brokers Say

Strong Buy 12
Buy 0
Neutral 13
Sell 0
Strong Sell 3
Total 28
buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

Shell Dividends

  Latest Previous
  Q2 Q1
Ex-Div 13-Aug-20 14-May-20
Paid 21-Sep-20 22-Jun-20
Amount 16.00¢ 16.00¢

Trades for 23-Oct-2020

Time Volume / Share Price
16:35 959,310 @ 971.80p
16:29 300 @ 971.10p
16:29 55 @ 971.30p
16:29 169 @ 971.30p
16:29 156 @ 971.30p

Shell Key Personnel

Chair Charles O Holliday
CEO Ben van Beurden
CFO Jessica Uhl

Top of Page