Shell Share Discussion Threads

[waldron] 29/12/2017 09:09

UBS is, or will be advising its specially well off clients to buy more SHELL

Rather good news as UBS NOT A RETAIL BANK LIKE LETS SAY BARCLAYS

SO the target should be considered etched in stone

Some might say better late than never

others might say GREAT SWISS SHARE WATCH TIMING

[ianood] 29/12/2017 08:48

Ariane - thank you for the UBS post

[waldron] 29/12/2017 08:39

Gas has biggest rally since Oct. with arctic freeze

By Bloomberg
Dec. 28, 2017 at 11:30 p.m.

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U.S. natural gas staged the biggest rally in two months as a frigid forecast signaled demand for the power-plant fuel may surge to new highs through the start of 2018.

The eastern half of the country is locked in a deep freeze with the potential to generate the highest weather-driven gas demand for the last week of December and the first few days of January in data going back to the 1950s, according to MDA Weather Services. Chicago's low on New Year's Day will be minus 1 degree Fahrenheit, 11 below normal, according to AccuWeather.

The cold wave that started this week has catapulted U.S. gas consumption to an all-time high for this time of year while simultaneously curtailing record production from shale deposits that had helped cap prices. The one-two punch jolted gas futures higher Thursday after the latest computer models showed the cold persisting for the next two weeks and deepening a supply deficit.

"It's a crazy day," said John Borruso, director of natural gas trading at Con Edison Energy in Valhalla, New York. "They finally realize it's winter and that it gets cold in winter."

Gas futures for February delivery rose 6.7 percent to $2.914 per million British thermal units on the New York Mercantile Exchange, the biggest percentage gain since Oct. 30.

[ariane] 28/12/2017 23:25

Two top oil major share picks for 2018
By Graeme Evans | Thu, 28th December 2017 - 09:34
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Two top oil major share picks for 2018

The journey has been long and hard, but there's a good chance that 2018 will mark a "sweet spot" for oil majors Royal Dutch Shell (RDSB) and BP (BP.).

That's the view of UBS analysts, who believe there's now a clearer picture of the industry after three years in which companies have scrambled to bring down costs and investment levels in line with oil prices.

In their note "The end of the beginning", UBS's European oil and gas team said an oil price in the $60 to $80 a barrel range now looked increasingly plausible.

They added: "We could be entering the sweet spot for the integrated sector with oil prices recovering, the downstream strong and spending under control."

Having reset their businesses between 2015 and 2017, UBS estimates that the point of cash neutrality for oil majors is likely to be $51 dollars a barrel in 2018. This figure crossed below the oil price in the second half of 2017.

They said: "The prospect for 2018 and 2019 is a sector that funds its investments and dividends and can generate attractive free cash flow (FCF) over and above that.

"We expect the excess FCF to be used to reduce debt, reduce equity in issuance and perhaps some tactical M&A."

Cash returned to shareholders is calculated to rise by 48% in 2018 versus 2017.

UBS makes no apology for having the same two top picks for 2018 as in 2017 - Royal Dutch Shell and Eni (E).

It said Royal Dutch Shell continues to represent the best example of the integrated business model. Its preference for Shell is based on a qualitative judgement of its portfolio and an upside comparison with the much higher-rated international peer, ExxonMobil (XOM).

UBS believes that 2018 will be a year of execution for Shell, having been through the pain of resetting its financial model and dealing with the market's negative reaction to its acquisition of BG Group.

UBS said the criticism of the BG deal misunderstood the weakening competitive position of the legacy Shell portfolio and the quality of the acquisition.

It added that recent Shell investor days have highlighted the value that this deal has brought, and the catalyst it represented on the wider restructuring of the group, which is not fully appreciated by the market.

UBS has a price target of 2,675p, which is based on a 2018 enterprise value (EV)/ debt-adjusted cash flow multiple of 7.4. This is about a 25% premium to the three-year average, reflecting improved capital productivity, and a modest premium to European peers reflecting the company's portfolio advantage.

BP and Total (TTA) are also 'buys' as they join Shell in the "sweet spot" for shareholder value generation.

BP has made significant strategic progress in 2017, while its Gulf of Mexico oil spill payments are expected to tail off significantly in 2018. Six of its seven major projects for 2017 have started up, with the other about to get underway.

UBS forecasts 2016-21 production growth at about 3% per annum.

The company's downstream operations have also been surprisingly strong, with retail, brand driven marketing and lubricants justifying a premium to the corporate multiple.

UBS has a 'buy' recommendation and 550p price target based on an EV multiple of 7.0, with projected 2018 dividend yield of 6.1%.

[2hoggy] 28/12/2017 23:16

Hurrah for global warming ...lol

[fjgooner] 28/12/2017 21:13

Re: montyhedge

28 Dec '17 - 08:08 - 1873 of 1878

Is the divi safe with the £2.5 billion tax charge ?

----------------

Of course it is - the dividend is 100% safe. For goodness sake, the scrip cancellation has just been enacted - how much safer does anyone need?

By the way, it IS NOT a £2.5 billion (Pounds Sterling) tax charge - it is expected to be a $2-2.5 billion (US dollar).

The dividend remained rock solid safe during oil at sub-$30s recently, during several global financial depressions and throughout all wars since World War Two - as you well know, so why ask such a question on such a minor event?

A one-off $2 to 2.5 billion US tax charge in the context of far more favourable tax treatment in the US thereafter (due to the future reduction in the US corporate income tax rate from 35% to 21%) is of little relevance outside of the period in which it is recognised as an identified item.

The only people who need to worry about Shell's dividends are those who were foolish enough to sell at much lower prices and are now sweating on the likelihood of having to buy back in way higher than they sold.

Both Brent and WTI are pushing up towards 2 and a half year highs. Even Natural Gas is up nearly 7% today as winter demand surges.

With one trading day to go, Brent's Q4 average price now stands at over $61.

Given that, a price north of £26 for RDSB on Q4 announcement date seems likely to me.

FJ

[waldron] 28/12/2017 09:17

Shell A
2,458.5 -0.20%



Shell B
2,482 -0.22%

[grahamite2] 28/12/2017 08:49

Exactly - it's right there in your post.

[waldron] 28/12/2017 08:18

i think you have no need to worry about divi as i believe the charge is only a bookkeeping
exercise and affects not the free cashflow


Further into the distant future we will see if it pans out positively

[montyhedge] 28/12/2017 08:08

Is the divi safe with the £2.5 billion tax charge ?

[waldron] 27/12/2017 16:55

Shell A
2,463.5 +0.45%



Shell B
2,487.5 +0.65%

[grupo guitarlumber] 27/12/2017 12:48

Barclays and Shell warn of huge hit to profits from Trump's tax reform

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US President Donald trump signs the tax cut bill which will generate a short term hit from Barclays and Shell Credit: UPI / Barcroft Images

Alan Tovey, Industry Editor

27 December 2017 • 12:03pm

Two of Britain’s biggest companies have warned that tax reforms in the US will result in a multi-billion pound hit to their earnings.

Barclays and Shell used the first day of trading since the festive break to signal the likely impact of the Tax Cuts and Jobs Act, which was signed into law in the US on Dec 22, as UK markets were shutting for the Christmas break.

The measure, enacted by President Donald Trump, will result in corporate tax rates falling from 35pc to 21pc, a move that the two FTSE 100 companies said they expected to be favourable in the long-term.


Barclays
Changes in the way deferred tax assets are measure will mean a short-term hit to profits. Credit: PA Wire

However, the reforms are likely to have a major short-term impact by putting a massive dent in profits, as companies have to recalculate the deferred tax assets they have built up on their balance sheets.



Barclays said the law would change its deferred tax assets in the US resulting in what it estimates to be a £1bn charge to profit after tax for the year. In its last annual results, Barclays posted a post-tax profit of £1.6bn after adjustments.

The bank also warned that its Common Equity Tier 1 (CET1) measure - which was brought in to help make banks more resilient after the financial crisis - would fall by 20 basis points as a consequence of the act. In its annual results Barclays said it had a CET1 level of 12.4pc, almost three times the required 4.50pc.

Shell echoed Barclays, saying it expected the changes to be positive in the longer run, but that they would reduce performance in the near term.
Shell pump
Shell said it could face a $2.5bn charge as a result of the new law Credit: Bloomberg

The energy giant warned that on the basis of its third-quarter results, it would take a non-cash charge on earnings of between $2bn (£1.5bn) and $2.5bn when it reports its fourth-quarter earnings in February.

Posting its third-quarter results in November, Shell said it had $4.1bn in earnings on a current cost of supply basis, its standard measure of profitability.

It is not just UK-listed companies that are likely to take a hit. Bank of America will take a $3bn charge, and Credit Suisse has raised the prospect of it being in the red for a third year running after highlighting a charge of 2.3bn Swiss francs (£1.7bn).

[waldron] 27/12/2017 11:16

Shell A
2,475 +0.92%



Shell B
2,496 +0.99%

[waldron] 27/12/2017 10:39

Wad

true, but deferred tax impact can be taken as immediate on the financials

and the lower tax despite good news will filter through to cash flows gradually.

Should be a great february when financials are available

The NOTES AND COMMENTS SHOULD BE VERY INTERESTING THIS YEAR

HAVE A GREAT 2018 ONE AND ALL

[wad collector] 27/12/2017 09:38

What a turnaround in last 2 yrs ; must confess didn't think share price would be touching £25 this yr.

I see the US tax change headline is a bit misleading , focusing on the charge to RDS rather than the benefits of lower corp tax.

[waldron] 27/12/2017 08:24

SPIKED INTO THE 2475 to 2575 BOX as we head for new year

talk of tax but it will be the us dollar that has a major impact next year and of course the usual suspects
such as energy pricing,etc etc etc....................................................SO MANY THINGS TO CORRELATE


Shell A
2,469 +0.67%



Shell B
2,486.5 +0.61%

[waldron] 27/12/2017 08:05

Shell Sees $2 Billion to $2.5 Billion Charge to 4Q Earnings Due to U.S. Tax Reform
27/12/2017 7:57am
Dow Jones News

Shell A (LSE:RDSA)
Intraday Stock Chart

Today : Wednesday 27 December 2017
Click Here for more Shell A Charts.

By Ian Walker



Royal Dutch Shell PLC (RDSA.LN) said Wednesday that it expects a charge to its fourth-quarter earnings of $2 billion to $2.5 billion following the changes to U.S. tax reform, driven by a re-measurement of its deferred tax position to reflect the lower corporate income tax rate.

Shell also said that actual impact isn't complete, and has based its estimate on third-quarter earnings. It said the estimated charge will be a non-cash adjustment and will be reflected as an identified item in its accounts.

It said the potential impact of the new tax reform will be favorable to the group and its U.S. operations.

The tax law passed by Congress last week and signed by President Trump on Friday includes a reduction of the corporate tax rate to 21% from the current 35% and limits on the deductibility of corporate interest payments, among other provisions that dramatically revamp corporate taxes.



Write to Ian Walker at [e-mail]; @IanWalk40289749



(END) Dow Jones Newswires

December 27, 2017 02:42 ET (07:42 GMT)

[ps0u3165] 27/12/2017 08:04

December 27, 2017 – Royal Dutch Shell plc expects the potential economic impact of the recently enacted US tax reform legislation to be favourable to Shell and to its US operations, primarily due to the future reduction in the US corporate income tax rate from 35% to 21%.

This change in US tax legislation (effective January 1, 2018) will impact Shell’s fourth quarter 2017 results but the analysis of the actual impact is not yet complete. Shell intends to determine and announce the actual impact including any fourth quarter movements, and balance sheet adjustments, as part of its fourth quarter 2017 results. However, on the basis of the third quarter 2017 financial statements, Shell would have incurred an estimated charge to earnings of $2.0 to 2.5 billion primarily driven by a re-measurement of its deferred tax position to reflect the lower corporate income tax rate. This charge represents a non-cash adjustment and will be reflected as an identified item.

[ps0u3165] 27/12/2017 08:00

Royal Dutch Shell is preparing to take on the UK's Big Six energy suppliers after it announced today it would buy First Utility, a leading challenger firm.