Goldman Sachs Downgrades Royal Dutch Shell (RDS-A) to Sell, FCF Cycle to Turn Negative

Goldman Sachs downgraded Royal Dutch Shell (NYSE: RDS-A) from Neutral to Sell with a price target of EUR28 for the A-shares and 2260p for the B shares, suggesting 5% and 2% upside respectively.

"Following the almost full delivery of the big three projects started in 2006 (Pearl GTL, Athabasca, Qatargas 4), Shell has outperformed its European peers by 23% over the past three years. On our estimates, Shell is now about to start another major capex expansion, to achieve another boost in growth in the second half of this decade and consolidate its leadership in unconventional (LNG, FLNG, GTL, shales). We estimate that over the next two to three years, Shell has little additional cash flow growth to deliver, while its older legacy assets are facing decline and the cost recovery of the new projects will only last another two to three years."

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 $70.44 yesterday.

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