- Shell
- 20 February 2025 16:10:08
Source: Sharecast
Berenberg expects Shell's core principles to remain the same, with a focus on strong execution, capital discipline and continued growth in free cash flow per share, along with a potential focus on boosting returns in its chemicals business and some of the "more challenged" low-carbon businesses.
The German bank noted that while lower capex "comes at the cost of potential lower growth in the longer term", Shell shareholders were "being well compensated", with the majority of the 13% FCF yield being returned via dividends and buybacks, which it expects to be maintained at roughly $14.0bn for 2025.
"The stock remains inexpensive, trading on 9.4x 2025E P/E and 5.0 EV/DACF," said Berenberg. "We adjust our estimates and EPS falls 2% for 2025E, due to lower integrated gas earnings, and increases 6% for 2026E due to stronger assumed downstream earnings. We increase our price targets to 3,250.0p and €39 (from 3,150.0p and €37.5, respectively) – based on a target 5.8x 2026E EV/DACF multiple."
Reporting by Iain Gilbert at Sharecast.com