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Where Analysts’ Ratings for Shell Stand ahead of Its Earnings

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Nov. 20 2020, Updated 5:19 p.m. ET

Analysts’ ratings for Shell

In this series, we’ve reviewed Royal Dutch Shell’s (RDS.A) 1Q18 estimates, segment-wise prospects, stock returns, moving averages, and stock price forecast prior to its earnings release on April 26, 2018. Now, let’s assess analysts’ ratings for Shell.

Shell (RDS.A) is rated by 11 Wall Street analysts. Of this total, ten analysts (or 91%) have assigned it “buy” or “strong buy” ratings, one has assigned it a “hold” rating, and no one has assigned it a “sell” or “strong sell” rating.

ExxonMobil (XOM), Chevron (CVX), and BP (BP) have been rated as “buys” by 33%, 78%, and 42% of analysts, respectively. Other global integrated companies Total (TOT), YPF (YPF), Suncor Energy (SU), and Petrobras (PBR) have been rated as “buys” by 33%, 92%, 93%, and 43% of analysts, respectively.

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Why analysts’ opinion on Shell is positive

Shell has been working on its levers to become a world-class investment. These levers include reducing operating costs, cutting capital spending, divesting noncore assets, and delivering new projects on time and within budget. Shell has been using these levers successfully to become more competitive, enhance its financial strength, and produce returns at all points in the oil price cycle.

Also, Shell’s robust upstream project pipeline and restructured downstream portfolio are further expected to support its mission of achieving growth in a competitive scenario. The company is focused on building on its financial strength by bringing its gearing level in accordance with its AA credit rating.

The company’s 2017 performance shows that its strategy has started yielding results, with a notable reduction seen in its net debt levels. The company’s improving earnings and surplus cash flows imply that it’s rapidly moving toward its goals.

It’s no surprise that many analysts rate Shell as a “buy.”

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