Shell Share Discussion Threads

[fjgooner] 28/2/2019 00:48

I couldn't agree more.

Some of these analysts need questioning.

So Shell's dividend is "too much of a burden"?

Really? With prices of Brent crude relentlessly remaining - quarter after quarter - above the stated base target of $60 (2016 equivalent).

And with cost reductions in the industry the highest in recent history?

And with standardisation finally being accepted across the board.

What about in the depths of the crude oil downturn when Shell bought out BG for $70Billion?

Were Shell's dividends "too much of a burden" then?

No. Of course not.

The next metric that will need addressing is gearing. Whilst the 20% target was very nearly met in 18Q4, the incoming IFRS 16 standard will probably mean that further progress will required to keep within a couple of points of that figure.

So perhaps a further 2 or 3 quarters to get back to that core metric - although, of course, all other business fundamentals will remain unchanged.

By the way, those analysts do not understand the way reserves are reported differently from companies with different complexities.

We can have a separate discussion on this subject if anyone wishes.

FJ

[bbonsall] 27/2/2019 23:00

Another analyst who talks about the buyback reducing outgoings on dividends, described by RBC as a necessity to curb outgoings. They then refer to the recuction in issued shares from 8,300m to 7,500m by 2020.
The effect of this reduction on the share price is not mentioned because it doesn’t suit their narative. This reduction in the number of shares means a £25 share price becomes £27.67 for the same market cap. One wonders how this calculation leads RBC to lower its target price!

[ariane] 27/2/2019 17:44

SHARECAST


Analysts at RBC Capital Markets downgraded oil giant Shell to 'sector perform' on Wednesday, citing three key reasons for the move.

RBC took a fresh look at the company's financial framework and concluded that a further $30bn in buybacks was needed post-2020 in order to reduce the firm's dividend burden, in turn "restricting its ability to high-grade its portfolio over time".

The Canadian bank, which also dropped its price target on Shell to 2,750p from 2,900p, felt that with ongoing uncertainty in the macro landscape and energy transition, Shell's dividend was "too much of a burden" over the medium-term, meaning its buyback was out of necessity, not choice.

"The current commitment to buyback ~$25bn over 2018-20 could reduce Shell's share count from 8,300m to ~7,500m by 2020, however, we think this is just the beginning," said RBC.

While it was not the sole driver of its downgrade, RBC also said Shell had screened poorly on its forward-looking reserve life analysis, something that "certainly does not help the investment case", even if it was less of a critical variable for Shell that for some of its peers.

However, RBC still saw the potential for capex to surprise to the upside through inorganic activity, with consensus factoring in spending at the low end of Shell’s guided $25-30bn range.

Lastly, the analysts pointed out that Shell's all-in breakeven was higher than for its sector rivals.

[waldron] 27/2/2019 17:20

Oil surges 3% after US crude stockpiles plunge by 8.6 million barrels

Oil prices rise after Saudi Arabia appeared undaunted after President Donald Trump called on OPEC to slacken its restrictions on crude production.
Saudi Energy Minister Khalid al-Falih said OPEC and its partners were "taking it easy" in response to the tweet from Trump.
U.S. crude stockpiles plunged by 8.6 million barrels last week, the Energy Information Administration reports.

Tom DiChristopher | @tdichristopher
Published 12 Hours Ago Updated 28 Mins Ago

[waldron] 27/2/2019 17:15

FTSE 100
7,107.2 -0.61%
Dow Jones
25,956.19 -0.39%
CAC 40
5,225.35 -0.26%


Brent Crude Oil NYMEX 66.67 +2.00%
Gasoline NYMEX 1.76 +2.05%
Natural Gas NYMEX 2.79 -0.25%

(WTI) - 27/02 17:49:06
57.13 USD +2.00%




Eni
15.222 +0.08%


Total
50.02 +0.64%

Engie
13.9 -1.63%

Orange
13.305 -0.75%



BP
534 +0.19%


Shell A
2,365.5 -0.42%


Shell B
2,384.5 -0.58%

[sogoesit] 27/2/2019 16:44

Put a bit of a boost on the oil price!
Any "explanation" from the pundits or talking heads?
Or just US production growth/surplus?

[fjgooner] 27/2/2019 15:55

United States Crude Oil Inventories



Wow - a nearly 8.7 million draw - that is well over 11 million better than consensus estimates.

[waldron] 27/2/2019 11:56

Brent Crude Oil NYMEX 66.11 +1.15%
Gasoline NYMEX 1.75 +1.33%
Natural Gas NYMEX 2.78 -0.75%



Shell B
2,377 -0.90%

[waldron] 27/2/2019 11:10

Shell B
2,378 -0.85%

[waldron] 27/2/2019 11:09

proactiveinvestors

RBC downgrades Shell and cautions over dividend burden
09:04 27 Feb 2019
“We think the need to complete a buyback out to 2025 could limit its options to high-grade its portfolio over time,” RBC said in a note
oil and gas operations
The price target drops to 2,750p from 2,900p.

RBC Capital has downgraded Royal Dutch Shell Plc (LON:RDSB) and cautioned that shareholder payout demands could restrict the oil firm’s growth ambitions.

It moved from ‘outperform217; to ‘sector perform’, and, the price target drops to 2,750p from 2,900p.

“With ongoing uncertainty in the macro landscape and energy transition, we see Shell’s dividend as too much of a burden over the medium term, meaning Shell's buyback is out of necessity, not choice,” RBC analyst Biraj Borkhataria said in a note.
READ: Deepwater Horizon is still costing BP billions every year

“The current commitment to buyback US$25bn over 2018-20 could reduce Shell’s share count from 8,300m to 7,500m by 2020, however, we think this is just the beginning.

“After analyzing the peer group, at today’s share price we think Shell needs at least another US$30bn in buybacks in order to reduce its dividend burden to a sustainable level.”

“We think the need to complete a buyback out to 2025 could limit its options to high-grade its portfolio over time.”

RBC also said that Shell screens poorly on the broker's forward-looking reserve life analysis.

“This is not the sole driver of our downgrade, as we think this metric is less relevant for Shell than peers, but it certainly does not help the investment case,” the analyst added.

“That said, we see the potential for capex to surprise to the upside through inorganic activity, with consensus factoring in spending at the low end of Shell’s guided US$25-30bn range.”

[waldron] 27/2/2019 09:57

Shell B
2,378.5 -0.83%

still holding up under pressure

and managing to stay in the 2375 to 2475p BOX

[sarkasm] 27/2/2019 09:07

RBC Capital Markets Sector Performer FROM 2,900.00 to 2,750.00 Downgrades

[la forge] 27/2/2019 07:34

CNBC

European markets set for a muted open ahead of Trump-Kim meeting

Recent remarks by the Chair of the Federal Reserve, an upcoming meeting between the leaders of North Korea and the U.S., and Brexit will be front and center during Wednesday's session.
A slew of companies are expected to publish updates, including Bayer, Safran, Lego, Taylor Wimpey, and Rio Tinto.

Alexandra Gibbs | @alexgibbsy
Published 58 Mins Ago CNBC.com

[fjgooner] 26/2/2019 23:36

Leghorn won't like the fact that OPEC+ can't be fooled or bullied again.

And as for:

"Investors are also looking ahead to weekly figures on U.S. crude inventories. U.S. crude stocks are expected to rise by 3.6 million barrels in weekly inventory reports. The first such report is due at 4:30 p.m. EST (2130 GMT) from the American Petroleum Institute."

This first API Weekly Crude Stock report actually showed a 4.2 million barrels drop rather than the expected 3.6 million barrels rise.

The Foghorn definitely won't like that.

Good.

FJ :)

See:

[waldron] 26/2/2019 17:21

FTSE 100
7,151.12 -0.45%
Dow Jones
26,084.01 -0.03%
CAC 40
5,238.72 +0.13%

Brent Crude Oil NYMEX 65.59 +1.05%
Gasoline NYMEX 1.73 +1.64%
Natural Gas NYMEX 2.80 -0.57%

(WTI)
- 26/02 17:56:34
55.79 USD +0.67%


Eni
15.21 -0.01%

Total
49.7 +0.38%

Engie
14.13 +0.43%

Orange
13.405 -0.92%

BP
533 -0.74%

Shell A
2,375.5 -0.63%

Shell B
2,398.5 -0.46%

[wbecki] 26/2/2019 15:54

"Nigeria trying it on - yet again. Pathetic.

Like a spoilt child kicking you in the shins whilst complaining that its pocket money is late"

Nigeria is home of the scam FJGooner.
Majority of scams emanate from Nigeria - and this is the scam of all scams.

[waldron] 26/2/2019 14:28

Shell B
2,392 -0.73%