Nomura Securities Reiterates a 'Buy' on Royal Dutch Shell (RDS-B) After Late December Dip
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Price: $51.06 --0%
Rating Summary:
0 Buy, 3 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
Rating Summary:
0 Buy, 3 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
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Nomura Securities reiterates a 'Buy' on Royal Dutch Shell (NYSE: RDS-B), PT 2800p.
Analyst, Theepan Jothilingam, said, "We reiterate our rating on the stock following a period of underperformance (-6%) since late December and address the issues of those in the market who believe that the company’s re-rating on fundamentals has gone too far. Overall, we see four parts to our investment case which are not currently being priced into the shares: 1) Cashflow generation may surprise to the upside through cost recovery at Pearl GTL in a USD 110/bbl environment – our estimate of 2012 FCF is USD 5.9bn; 2) Shell is best placed of the European large caps to benefit from tighter LNG markets; 3) Exploration and appraisal activity in South America and the Arctic may prove up material new oil hubs, even for a company the size of Shell; and 4) Restructuring may surprise on the upside – we estimate that, while Shell’s target is to dispose of c. USD 3bn of assets, an upside case could be closer to USD10bn. In that context, we maintain valuation is not particularly demanding – trading at 8.0x 2012 P/E (a 7% premium) and a dividend yield of 4.5%. The company report FY results on 2 Feb."
For an analyst ratings summary and ratings history on Royal Dutch Shell click here. For more ratings news on Royal Dutch Shell click here.
Shares of Royal Dutch Shell closed at $73.34 yesterday.
Analyst, Theepan Jothilingam, said, "We reiterate our rating on the stock following a period of underperformance (-6%) since late December and address the issues of those in the market who believe that the company’s re-rating on fundamentals has gone too far. Overall, we see four parts to our investment case which are not currently being priced into the shares: 1) Cashflow generation may surprise to the upside through cost recovery at Pearl GTL in a USD 110/bbl environment – our estimate of 2012 FCF is USD 5.9bn; 2) Shell is best placed of the European large caps to benefit from tighter LNG markets; 3) Exploration and appraisal activity in South America and the Arctic may prove up material new oil hubs, even for a company the size of Shell; and 4) Restructuring may surprise on the upside – we estimate that, while Shell’s target is to dispose of c. USD 3bn of assets, an upside case could be closer to USD10bn. In that context, we maintain valuation is not particularly demanding – trading at 8.0x 2012 P/E (a 7% premium) and a dividend yield of 4.5%. The company report FY results on 2 Feb."
For an analyst ratings summary and ratings history on Royal Dutch Shell click here. For more ratings news on Royal Dutch Shell click here.
Shares of Royal Dutch Shell closed at $73.34 yesterday.
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