Shell Plc's (LSE:SHEL, NYSE:SHEL) trading statement on Friday has been described as “overall a positive update”, as analysts at Jefferies repeated a ‘buy’ recommendation for the London-listed oil major.
Earlier today, Shell gave investors a first quarter update and forecast its integrated gas production to range between 960 to 1,000 thousand barrels of oil equivalent per day (kboe/d).
Liquefied natural gas (LNG) liquefaction volumes expected to lie between 7.2 to 7.6 million tonnes (MT) in the first quarter.
This is up from the previous quarter’s guidance of 901 kboe/d and 7.1 million tonnes in LNG volumes.
In the Upstream sector, Shell forecast a narrower production range of 1,820 to 1,920 kboe/d, slightly above the fourth quarter’s top range.
Shell's Renewables and Energy Solutions segment is expected to post between a loss of $100 million and a gain of $500 million for the quarter.
Reacting to the update, Jefferies London based analyst team highlighted that Shell’s trading guidance addressed investor concerns around gas trading normalisation.
“Volumes across all businesses look better than expected, and we expect integrated gas liquefaction volumes to fall at the upper end of the revised 7.2-7.6mt guidance,” Jefferies said in a note.
The ‘buy’ note, ahead of Shell’s first quarter results, 2 May, comes with a price target of £30.00 which suggests meaningful upside to the current share price of around £27.68.