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Shell downgraded after below par results

02 Aug 2018

“Recent quarterly results have come in below our expectations,” Morgan Stanley analysts said in a note

Morgan Stanley reckons portfolios could do with fewer Royal Dutch Shell PLC (LON:RDSB) shares, reducing its rating for the oiler to ‘equal weight’ from ‘overweight’.

The downgrade follows Shell’s quarterly results, which were out last week.

“Recent quarterly results have come in below our expectations,” Morgan Stanley analysts said in a note.

“FCF and gearing are still set to improve but no longer in a differentiated manner. Dividend growth is now lagging peers, and the buyback has started but at a lower-than-expected pace.

“We feel our overweight case is no longer supported.”

Morgan Stanley also downgraded its price target, to 2,860p from 3,160p.

The analysts added: “The improvement process that Shell has put in motion is not complete yet.

“However, following two disappointing quarters, we have lowered our expectations.”

SOURCE

READ: Shell to boost investor appeal with US$25bn share buyback

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