Wednesday’s update was largely in line with the Swiss bank’s expectations, nonetheless, it retains a ‘buy’ rating for Shell.
The promise of higher shareholder distributions was meanwhile said to be “largely in line with our expectations”.
Alongside a 1,860p target the Swiss bank’s ‘buy’ sees some 28% upside to Shell’s current price.
“Both Integrated Gas and Upstream are expected to report earnings that reflect the improvement in oil and gas prices,” analyst Jon Rigby said in a note.
“Marketing margins are expected to be higher than Q1 2021, reflecting strong retail unit margins, but part offset by lower lubricant margins due to base oils and additives shortages. Refining indicative margin is US$4.17/bbl (up from US$2.65/bbl at 1Q). Trading and optimisation results are expected to be similar to Q1.”
Rigby added: “We see swings and roundabouts on earnings and cashflow guidance although deferred tax benefits in Upstream and Corporate will help reported earnings.”
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