Shell Share Discussion Threads

[the grumpy old men] 03/5/2019 17:59

03 May, 2019
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Broker Recommendations

Iain Gilbert
Sharecast News
03 May, 2019 16:51
Broker tips: Royal Dutch Shell, Lloyds
lloyds banking group

ShoreCap stuck to its previous 'buy' recommendation for Lloyds' shares, despite the lender having fallen short of the broker's estimates for its first-quarter net interest income.

On the flip side, non-interest income, costs and impairments had all come in better-than-expected, analyst Gary Greenwood said in a research note sent to clients.

The above, together with Lloyd's unchanged guidance for the full-year led Greenwood to stay put on his own estimates.

Nevertheless, the Prudential Regulatory Authority's decision to reduce the regulatory capital requirement (core Tier 1) asked of Lloyds from 14.0% of assets to 13.5%, meant the lender now had more headroom for capital distributions, Greenwood said.

Roughly another £1.0bn, the analyst estimated, leading him to raise his forecast for Lloyd's share buybacks in 2020 from £1.5bn to £2.5bn.

Lloyds was guiding towards 170-200 basis points of capital generation over 2019, equating to approximately £3.5bn-4.1bn, of which £2.4bn would be consumed by dividends.

With the additional £1.0bn worth of funds available, the broker kept his estimate of the shares' fair value at 80.0p.

Analysts at Berenberg bumped up their target price for shares of Royal Dutch Shell from 3,000p to 3,100p, pointing out to clients the oil major's upwardly revised guidance for payouts and telling them that shares could recover from their recent underperformance if "momentum can be maintained".

They also noted the outfit's "solid" cash flow in a "challenging" quarter in terms of the macroeconomic backdrop, even if gearing did tick higher.

Berenberg also noted the strength seen in Shell's integrated gas unit bode well for the rest of the year, notwithstanding weak spot LNG prices in the first quarter.

Management had also upped the pace of share buybacks, from $2.5bn per quarter to $2.75bn "demonstrating the commitment to meeting the target of USD25bn in buybacks over the 2018-20 period."

And now, the German broker said: "with gearing under control and strong FCF generation, investors are looking to the investor day in June for an update on the shareholder returns beyond 2020."

The exact date of the Investor Day had yet to be announced and Shell deferred any comment regarding the potential timing on the day of its results.

On the back of lower depreciation and amortisation together with higher earnings assumptions, mainly for Integrated Gas and Refining, the broker marked up its estimates for Shell's earnings per share in 2019 and 2020 by 10% and 4%.

"Following recent underperformance, this strong set of results may lead investors to revisit the story over the coming months, with interest focusing around the investor day scheduled for June."

Berenberg's recommendation for Shell's shares was kept at 'buy'.

[petepitstop] 03/5/2019 17:47

Management Day London 4th June, New York 6th June. With regard to the dividend I think buy backs will take priority as long as value is to be had especially as sentiment is still poor. Markets can often be very slow to react to a change of performance in any company that has been out of favour for many years.

[waldron] 03/5/2019 17:15

FTSE 100
7,380.64 +0.40%
Dow Jones
26,449.54 +0.54%
CAC 40
5,548.84 +0.18%

Brent Crude Oil NYMEX 71.35 +0.85%
Gasoline NYMEX 2.03 +0.80%
Natural Gas NYMEX 2.56 -1.00%

(WTI) - 03/05 17:51:09
62.21 USD +0.84%

Eni
15.088 +0.36%


Total
49.17 -0.43%

Engie
13.255 +0.34%

Orange
13.93 -1.24%


BP
548.1 +0.11%


Shell A
2,454.5 +0.04%


Shell B
2,472.5 -0.10%


SO WE END THE WEEK IN THE 2375 to 2475p BOX

[chiefbrody] 03/5/2019 16:38

Amen to that!

[fjgooner] 03/5/2019 16:28

I wish - the hopeless old bag.

[steve73] 03/5/2019 16:25

GBP rising very strongly against the dollar over the last hour or so is putting the FTSE under pressure....

Wonder what's caused that.. Has May resigned or something..?

[imperial3] 03/5/2019 16:24

In spite of all the positive noises from so many eminent sources,not least the results,the share price disappoints.When will the worm turn?

[spud] 03/5/2019 16:13

Berenberg's recommendation for Shell's shares was kept at 'buy'.

Try telling that to the Yanks - NYSE opens and 80% of the FTSE drops. It's been like that for months now...

spud

[waldron] 03/5/2019 16:10

Alexander Bueso
Sharecast News
03 May, 2019 15:40 03 May, 2019 15:40
Berenberg marks up Shell target price ahead of Investor Day
Oil refinery, energy
Royal Dutch Shell 'B'
2,483.00
15:54:27 03/05/19
-0.19%
8.00

Analysts at Berenberg bumped up their target price for shares of Royal Dutch Shell from 3,000p to 3,100p, pointing out to clients the oil major's upwardly revised guidance for payouts and telling them that shares could recover from their recent underperformance if "momentum can be maintained".
FTSE 100
7,388.96
15:54:26 03/05/19
0.51%
37.65
FTSE 350
4,104.12
15:54:26 03/05/19
0.45%
18.21
FTSE All-Share
4,050.67
15:54:24 03/05/19
0.44%
17.64

They also noted the outfit's "solid" cash flow in a "challenging" quarter in terms of the macroeconomic backdrop, even if gearing did tick higher.

And the strength seen in its integrated gas unit bode well for the rest of the year, not withstanding weak spot LNG prices in the first quarter.

Management had also upped the pace of share buybacks, from $2.5bn per quarter to $2.75bn "demonstrating the commitment to meeting the target of USD25bn in buybacks over the 2018-20 period."

And now, the German broker said: "with gearing under control and strong FCF generation, investors are looking to the investor day in June for an update on the shareholder returns beyond 2020."

The exact date of the Investor Day had yet to be announced and Shell deferred any comment regarding the potential timing on the day of its results.

On the back of lower depreciation and amortisation together with higher earnings assumptions, mainly for Integrated Gas and Refining, the broker marked up its estimates for Shell's earnings per share in 2019 and 2020 by 10% and 4%.

"Following recent underperformance, this strong set of results may lead investors to revisit the story over the coming months, with interest focusing around the investor day scheduled for June."

Berenberg's recommendation for Shell's shares was kept at 'buy'.

[fjgooner] 03/5/2019 14:47

Morningstar analysts - RDSB fair value estimate of £36

Shell Still Undervalued, say Analysts

Shell's quarterly earnings outperform its oil rivals, say Morningstar analysts, with its shares trading below their fair value

Allen Good 3 May, 2019 | 8:56AM



Royal Dutch Shell (RDSB) posted an impressive first quarter with earnings growth across all of its operating segments and continued strong cash flow generation. The quarter stands out from other integrateds oil firms’ relatively weak reports and demonstrates the value of Shell’s integrated model while supporting our thesis of continued earnings and free cash flow growth during the next several years. As such, our fair value estimate and moat rating are unchanged. We continued to think this improvement is underappreciated by the market, leaving the shares trading a wide discount to our fair value estimate of £36 per share. The current share price is around £24.

Adjusted earnings slipped to $5.4 billion from $5.5 billion in the same quarter last year as improved performance in the operating segments was offset by higher corporate charges due to the absence of tax credits and changes related to the implementation of new accounting standard IFRS 16. Integrated gas segment earnings increased to $2.5 billion from $2.4 billion as higher realised prices and increased contributions from liquefied natural gas portfolio optimisation offset lower production and sales volumes. Upstream earnings improved to $1.7 billion from $1.6 billion last year as reduced operating expenses and higher volumes outweighed the impact of lower oil prices.

Oil Production Should Recover This Quarter

Production across the entire portfolio, including upstream and integrated gas, fell 2% to 3.75 million barrels of oil equivalent a day from 3.84 mmboe/d the year before, largely due to divestments and maintenance activity. Volumes are expected to bounce back in the second quarter thanks to new project ramp-ups and lower maintenance activity.

In contrast to many peers, Shell reported an increase in downstream earnings to $1.82 billion from $1.77 billion. Strong results from crude oil and products trading offset weakness in refined products and chemical margins.

Operating cash flow also increased to $11.3 billion excluding working capital and the positive impact of IFRS 16 implementation, from $10.4 billion last year thanks in part to greater contribution from high-cash-margin barrels in the Gulf of Mexico, demonstrating the portfolio upgrading that has occurred in recent years. During the quarter, Shell repurchased $2.3 billion in shares, bringing the total to $6.75 billion since the launch of its program to buy back $25 billion by year-end 2020. It plans to repurchase another $2.75 billion by the end of July.

Return on capital employed improved to 8.4% from 7.1% last year, increasing confidence that Shell can achieve its 2020 goal of 10%.

[sarkasm] 03/5/2019 13:27

LONDON (Agefi-Dow Jones) - Royal Dutch Shell is on track to meet its 2020 targets, say analysts at RBC Capital Markets, who are now expecting more clarity over the next five years. The bank says Shell's gas business continues to perform well despite headwinds in the liquefied natural gas sector, while earnings and cash flow remain volatile quarter-over-quarter. RBC, however, confirms its investment scenario because the Anglo-Dutch giant has most often surprised. The issue of raising the dividend is also acute, but the bank believes that it would not be prudent to increase shareholder compensation currently.


-Olivier Griffin, Dow Jones Newswires (French version Jérôme Batteau) ed: VLV


Agefi-Dow Jones The financial newswire


(END) Dow Jones Newswires


May 03, 2019 05:37 ET (09:37 GMT)

[tornado12] 03/5/2019 11:52

Another good rise today. Maybe the market is finally re-rating RDS share price !!??!!

[the white house] 03/5/2019 11:12

Jolly nice to have a GBP35m buyer every day for the next 18 months on your sideRDSB TWH - GBP32.23 Reiterates

[grupo] 03/5/2019 10:38

RDSB UBS Buy 2,900.00 - Unchanged

[grupo] 03/5/2019 09:04

Royal Dutch Shell PLC (RDS-A) Q1 2019 Earnings Call Transcript
[Motley Fool]
Motley Fool Transcribers, The Motley Fool
Motley FoolMay 3, 2019
Logo of jester cap with thought bubble.
Logo of jester cap with thought bubble.

Image source: The Motley Fool.

Royal Dutch Shell PLC (NYSE: RDS-A)
Q1 2019 Earnings Call
May. 02, 2019, 9:30 a.m. ET
Contents:

Prepared Remarks
Questions and Answers
Call Participants

Prepared Remarks:

Jessica Uhl -- Chief Financial Officer

Thank you. Ladies and gentlemen, good afternoon and welcome to Shell's First Quarter 2019 Results Call. Before we start, let me pause on the disclaimer statement.

Shell delivered another strong set of results in the first quarter of 2019. Building on the successes of 2018, in Q1 2019 we generated cash flow from operations excluding working capital movements of $12.1 billion and CCS earnings of $5.3 billion . These results show the combined strength of our strategy, portfolio, and operational performance. We have reshaped Shell to deliver higher returns across our Upstream, Integrated Gas and Downstream businesses. Today, I will present our Q1 results and then talk about portfolio highlights, before providing more insight into our earnings and cash flow, including the impact of the new IFRS 16 accounting standard. As I go through the results, please keep in mind, they are presented on a post-IFRS 16 basis.

For Shell to deliver a world-class investment case, we need to generate leading, growing and resilient cash flows and returns, and be disciplined with our cash allocation. In the first quarter, we did just that. Cash flow from operations, excluding working capital movements, were $12.1 billion , once again the highest in our sector. This was at an average Brent price of $63 per barrel. Our organic free cash flow for the quarter was $3.4 billion . This includes a working capital impact of some $3.5 billion .

CCS earnings, excluding identified items, amounted to $5.3 billion , and ROACE reached 8.4%. We are continuing to demonstrate progress toward ROACE of 10% by the end of 2020, even with the headwinds associated with IFRS 16. For Q1 2019, our gearing is 26.5% post-IFRS 16, or 21.9% on an IAS 17 basis, in line with the expected change. I will talk through this further later in the presentation.

Our capital investment in the quarter was $6.7 billion . Our share buyback program is progressing with some $6.75 billion in shares purchased in the last seven months. And the next tranche of up to $2.75 billion begins today. The share buyback program is executed under irrevocable contracts of approximately three months with a bank. The contracts allow for some flexibility with respect to the total value of shares purchased and the time period over which they are purchased, in order to achieve the best commercial terms. Once the contract has commenced, we do not have the ability to alter the phasing or amount of shares purchased. We continue to believe in our ability to complete $25 billion in share buybacks by the end of 2020, subject to further progress on debt reduction and oil price conditions.

In summary, a good quarter, with very competitive performance from our Upstream, Integrated Gas and Downstream businesses. This competitive performance can be seen when we look at our cash flow generation and returns on a four quarter rolling basis. To deliver on our world-class investment case ambition, we have reshaped Shell. Our leading cash generation and returns position reflects the strategic and portfolio choices we have made. And our focus on operational excellence, integration and our brand has made the most of these choices.

We are committed to maintaining our leading position in each of these metrics, to continue delivering competitive returns and cash flow from operations. And, while it's a priority for us to deliver our results, how we run our business is also key to our strategy. To sustainably deliver the world-class investment case, Shell has to be known as a company that performs and behaves in the right way to achieve its strategic ambitions.

Maintaining a strong societal licence to operate is a key pillar of our strategy. For us to do this, we need to demonstrate commitment to three core elements. Firstly, no harm. No harm to people and no harm to the environment. The second element is to have good products. We need to make and sell products that our customers want and need, and we must be good product stewards. The third, and final, element, is to contribute to society in order to be a valued part of society. This means supplying energy, providing employments, bringing investment and prosperity with our projects, and more.

[grupo] 03/5/2019 08:57

RDSB Berenberg Hold 2,600.00 - Reiterates

RDSB Deutsche Bank Hold 2,650.00 - Reiterates

[waldron] 03/5/2019 08:29

energyvoice


Oil & Gas / North Sea
Shell working hard on ‘best outcome’ for Brent decom, CFO says
by David McPhee
03/05/2019, 7:40 am

Jessica Uhl, chief financial officer at Shell.
Jessica Uhl, chief financial officer at Shell.
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Oil giant Shell yesterday cited a “strong start to 2019” and increased pre-tax profits as the reason for implementing a bullish share buyback programme.

The firm announced it intends to repurchase almost £20 billion shares by 2025, with the first tranche expected to see it re-aquire £2.1bn over the next three months.

Shell pre-tax profits rose to £7.2bn for Q1 if this year, compared to £6.3bn over the same period in 2018.

But, by Shell’s own preferred method of reporting it also experienced a 7% drop in statutory earnings and a 2% fall in underlying earnings.

Chief executive Ben van Beurden said the firm had delivered “robust results” despite challenging market conditions.

The firm’s chief financial officer (CFO) Jessica Uhl also said the necessary work was being done on achieving a Brent decommissioning solution.

Shell has said removing the 300,000 tonne legs would be “riddled with safety risks” and had little merit for the environment.

Mr van Beurden said: “Shell has made a strong start to 2019, with the first quarter financial performance demonstrating the strength of our strategy and the quality of our portfolio of assets.

“Our integrated value chain enabled our Downstream business to deliver robust results despite challenging market conditions.

“The consistent financial performance across all our businesses provides confidence in meeting our 2020 outlook.”

Shell CFO, Ms Uhl, also said the firm had seen a “huge step up” in its North Sea performance, causing a renewed sense of faith in the basin.

She said three final investment decisions (FIDs) in the North Sea had allowed the firm to become a “more competitive business”.

Ms Uhl added that Shell was working hard on a “best outcome” for the Brent platforms decommission but that there were still “many elements to consider”.

She said: “We’ve done everything we can to bring the right expertise to bear on our strategy on the Brent decommissioning.

“We now need to find the best solution for all parties.”

[waldron] 03/5/2019 07:56

Markets
European markets seen higher as investors monitor earnings, US jobs data
Published an hour agoUpdated 26 min ago
Elliot Smith
@ElliotSmithCNBC




Key Points

European stocks set to open slightly higher on Friday morning.
Societe Generale and Adidas are reporting quarterly earnings ahead of morning trade.
Investors will have an eye on U.S. payrolls data.

[ariane] 02/5/2019 19:59

Natural Gas | Oil 02 May 2019 | 18:28 UTC London

Shell not 'desperate' to grow US shale despite Anadarko sale: CFO

Author Robert Perkins Editor Derek Sands Commodity Natural Gas, Oil

London — Shell is keen to grow its US shale oil portfolio but does not feel pressured to chase new acquisitions, as Occidental and Chevron battle for control of Anadarko's Permian-rich upstream assets, Shell Chief Financial Officer Jessica Uhl said Thursday.
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Shell doesn't "need" to do a US shale deal as it already has a strong US portfolio of shale and tight oil, which has further room for volume growth, Uhl said.

"We have significant growth capacity in our existing position and, in that sense, we are not desperate. We don't need to find new shale exposure ... but we like the business," Uhl told analysts on an earnings call.

In January, Shell CEO Ben van Beurden said the company's portfolio in the prolific Permian shale basin was "a bit small," fueling to speculation about an acquisition there.

"If there is one thing that is wrong with our Permian portfolio it is that it is a bit small ... we will look at opportunities to grow in a very disciplined way," van Beurden told reporters during an earnings presentation. "We have been looking at lots of opportunities in the past and we will continue to do that going forward."

Van Beurden said Shell is also keen to integrate vertically in the Permian adding trading and optimization capability to take advantage of dislocations in US gas, oil and NGL prices.

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The ongoing bidding battle for US independent Anadarko Petroleum between Chevron and Occidental has sparked speculation of a new round of acquisitions in the industry to bulk up Permian shale positions.

Uhl said any US shale acquisition would need to fit within Shell's strict capital expenditure target of between $25 billion and $30 billion this year, a figure which includes any acquisitions.

Shell is allocating between $2 billion and $3 billion of capital every year to the shale business, of which half is being directed at its position in the Permian basin.

Shell has said it plans to boost its Permian Basin output by 2020 to 200,000 b/d of oil equivalent, with just one-third of production being crude and the rest lower-value gas and gas liquids.

-- Robert Perkins, [e-mail]

-- Edited by Derek Sands, [e-mail]