Royal Dutch Shell (LON:RDSA) is under pressure to repay its investors’ patience this week by beginning a $25-billion (£19 billion) share buyback plan, The Telegraph reports. The news comes ahead of the blue-chip group’s second-quarter results on Thursday.
Shell’s share price has slipped marginally into the red in today’s session, having given up 0.02 percent to 2,724.50p as of 09:38 BST. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.44 percent lower at 7,644.73 points. The group’s shares have added more than 30 percent to their value over the past year, as compared with about a 2.5-percent gain in the Footsie.
Shell could launch share buyback
The Telegraph reported last night that expectations were higher that Shell could signal the start of buybacks alongside posting its quarterly report this Thursday. The newspaper notes that the group’s CFO Jessica Uhl has said that the group would begin the task of buying back $25 billion worth of scrip payments before the end of the decade, once a $30-billion asset sale programme has made a dent in the company’s $88-billion debt pile and rising oil prices have boosted cash flow.
The newspaper quoted Gordon Gray, of HSBC, as saying that the group was one of the major oil companies that “look closer to restarting buy-backs than most” and could announce investor windfall as soon as this week.
Analyst ratings update
UBS, which has a ‘buy’ rating on Shell, set a price target of 3,000p on the shares last week, while HSBC reaffirmed the company as a ‘hold’ without specifying a valuation on the stock. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 2,878.77p.