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Shell: Where Wall Street Ratings Stand ahead of Earnings

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Apr. 23 2019, Published 3:09 p.m. ET

Analyst ratings for Shell

Royal Dutch Shell (RDS.A) is slated to post its first-quarter earnings on May 2, 2019. In this post, we’ll assess analyst ratings for Shell ahead of its earnings release.

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Eleven Wall Street analysts have rated Shell. Of the 11, nine (or 82%) analysts have assigned “buy” or “strong buy” ratings, two have given a “hold” rating, and none have a “sell” or “strong sell” rating on the stock.

Also, Petrobras (PBR), Chevron (CVX), and BP (BP) have “buy” ratings from 70%, 76%, and 55% of analysts, respectively. Other integrated firms Total (TOT), YPF (YPF), and PetroChina (PTR) have “buy” ratings from 100%, 79%, and 33% of analysts, respectively.

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Why analysts’ opinion of Shell is favorable

Wall Street analysts favor Shell likely due to its strengthening debt and liquidity positions. Shell’s debt position strengthened in 2018. In the year, Shell’s total debt fell by $9 billion year-over-year. Also, Shell’s total debt-to-total capital ratio and net-debt-to-EBITDA ratio stood below their industry averages, pointing at a favorable scenario.

Shell’s cash flows have also risen. In 2018, the company recorded surplus cash flows from operations after covering its capex and dividend outflows—a favorable situation that came as no surprise, since the company announced the third tranche of its $25 billion share buyback program.

For more on Shell, check out “Shell Strengthened Last Year: Where’s It Headed?” The series outlines the improvement in Shell’s position due to its strong upstream portfolio, robust strategy, and crucial downstream segment.

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