leadf
logo-loader
viewRoyal Dutch Shell PLC
(
LSE:RDSB
)

Royal Dutch Shell's earnings forecast upgraded by UBS to reflect buyback plans

Cash flow from operations is likely to improve further as the year wears on while free cash flow will benefit from divestment completions, UBS sadi

Royal Dutch Shell PLC -

UBS is increasing its earnings forecast for Royal Dutch Shell PLC (LON:RDSB) after the oil giant’s second-quarter update earlier this week.

The company signalled it will be distributing 20-30% of cash flow from operations (CFFO), which most analysts have interpreted as a return of share buybacks rather than any significant increase in the dividend.

“We expect the initial step up in distributions to be done via share buybacks, especially given the current share price, but see Shell as retaining optionality as it looks at the sustainability and resilience of CFFO, and as debt is further lowered, to revisit dividend payout levels also. A critical element of the investment case in any oil company, given the challenges of energy transition and ESG [environmental and social governance] effects on institutional investors, is a strong financial case and an attractive payout forms an important component part. This earlier than expected change enhances the investment case for Shell, we believe,” UBS said.

The Swiss bank has upped its earnings per share estimates for the current year by 4% and by an average of 0.5% for 2022-25.

UBS rates the shares a “buy” with a price target of 1,860p.

Shell shares currently trade at 1,419.6p, down 0.4% on the day.

Quick facts: Royal Dutch Shell PLC

Follow
LSE:RDSB

Price: 1528.4 GBX

Market Cap: £118.75 billion

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Iofina says 'our business has been strong' reporting record revenue and...

Iofina PLC (AIM:IOF, OTC:IOFNF, FRA:IF7) (AIM:IOF, OTC:IOFNF, FRA:IF7) Tom Becker joins Proactive London to explain what drove their record revenue and profit in the first half.  Debt also fell in the first half of the year despite production outages caused by extreme weather and reduced...

1 day, 3 hours ago

2 min read