SHEL - Shell: Strong Q1 Blows Estimates Out Of The Water
2024-05-27 11:02:56 ET
Summary
- Shell delivered a strong Q1 with adj. earnings beating consensus by 18% as trading desks profited off market disruptions in refined products and operating performance improved.
- Portfolio high-grading continues with further $2.8B of divestments in non-core, underperforming businesses while management eyes a stake in Galp's 10Bboe Namibia find.
- Buyback pace to continue to $3.5B/quarter, implying a ~19% uplift to previous estimates and a >10% annual distribution yield for 2024.
- I reiterate my Overweight rating and $90 price target and note that shares continue to trade at a ~33% discount to Total and US peers on 24E FCF.
I initiated my coverage of British oil & gas supermajor Shell plc ( SHEL ) in late March with an Overweight rating that was based on three key factors: 1) leading scale and expertise in LNG, 2) a best-in-class trading division, allowing the company to profit off price volatility and 3) a credible new strategy focused on delivering attractive shareholder returns and cost savings....
Shell: Strong Q1 Blows Estimates Out Of The Water