Shell PLC (LSE:SHEL, NYSE:SHEL) management and strategy changes last year are now bearing fruit, that’s according to analysts at Berenberg – which today repeated a ‘buy’ recommendation.
The European investment bank highlighted Shell’s strong cash flow growth, helped by cost discipline.
“With attractive growth projects starting up over the coming two years – combined with the company’s ongoing capital discipline – we think that Shell is well placed to deliver underlying cash-flow growth, which should translate into further strong cash returns or shareholders,” analyst Henry Tarr said in a note.
Berenberg has a price target of 3,100p for Shell, compared to the current price of around 2,500p.
The bank noted though that a weaker macro environment poses the main risk to the investment case for Shell.
“The balance sheet remains strong, with gearing at 17% (6% excluding operating leases) and with no hybrid debt – allowing the company significant flexibility with regards to shareholder returns or strategy looking forward,” Tarr added.
“Looking beyond 2025, we expect the strategy to remain focused on driving higher returns and rewarding shareholders.”