Royal Bank of Canada expects Royal Dutch Shell (LON:RDSA) to grow free cash flow over the next few years, Proactive Investors reports. The comments came as analysts weighed in on the oil major’s first-quarter results yesterday which revealed a surge in profits but showed that the group’s free cash flow had inched lower in the first three months of the year.
Shell’s share price, which took a hit in the previous session, has clawed back some losses in today’s trading, having added 0.44 percent to 2,513.50p as of 09:38 BST. The advance is largely in line with the broader UK market, with the benchmark FTSE 100 index currently standing 0.48 percent higher at 7,456.71 points.
RBC upbeat on oil major
RBC, which rates Shell as a ‘preferred’ super-major, reckons that the company will grow free cash flow above and beyond the group’s dividend commitments over the next few years.
“We also remain positive on LNG over the next few years, where Shell is the market leader,” the broker’s analyst Biraj Borkhataria pointed out, as quoted by Proactive Investors, adding that the company had reiterated its commitments to being at the lower end of its capex framework, as well as its intention to buy back shares.
Other analysts on group
Jefferies meanwhile pointed to Shell’s progress with its portfolio, with the group having reached final investment decision for two projects, and having generated total divestments of $1.3 billion. Proactive Investors quoted the broker’s analyst Jason Gammel as saying in a note that there was little change to the group’s financial leverage and that his investment thesis remained unchanged even though the results marked a second consecutive quarter of ‘somewhat disappointing’ cash flow.