Shell PLC (LSE:SHEL, NYSE:SHEL) shares rose on Thursday after the oil major delivered second-quarter results that topped expectations, with investors giving a guarded welcome to another robust update.
UBS kept its 'buy' rating and a 2,950p price target, highlighting an 8% earnings beat at the EBITDA level and a 14% beat at the net income line, driven by stronger performance in the upstream and marketing businesses and tighter cost controls.
Operating cash flow, excluding working capital and adjusting for accounting effects, was 25% ahead of consensus at $12.6 billion, boosted in part by the recognition of dividends from Shell’s Dutch NAM joint venture.
Net debt rose 4% on the quarter, largely due to higher lease liabilities in Brazil, but the group maintained its $3.5 billion share buyback and held the dividend steady at $0.358 per share.
Shell also guided for higher LNG production in the third quarter, supported by the start-up of LNG Canada.
UBS notes that distributions and capital spending plans remain unchanged, and with earnings momentum continuing, the latest results have reassured investors.
The stock was up 1% to at 2,709.5p and has advanced 7% year to date.