Hargreaves Lansdown sees Royal Dutch Shell’s (LON:RDSA) latest results as ‘disappointing,’ despite the oil major’s $25-billion buyback, Citywire reports. The comments came after the Anglo-Dutch group updated investors on its interim performance yesterday, with the FTSE 100 company’s earnings falling short of analyst expectations.
Shell’s share price tumbled on the back of the results, giving up 3.05 percent to 2,576.00p. The stock weighed on the benchmark FTSE 100 index, which closed marginally higher in the previous session, adding 0.06 percent to 7,663.17 points.
HL sees results as ‘disappointing’
Citywire quoted Hargreaves Lansdown’s analyst Nicholas Hyett as commenting yesterday that Shell’s numbers were ‘actually a bit disappointing’, given that earnings were behind expectations.
“That basically reflects the fact that the recovery in earnings has been driven by a higher oil price, with production more or less flat and costs actually rising,” he pointed out, adding that while a higher oil price was ‘a welcome boost,’ it was not something that the Anglo-Dutch group can control. The comments came after Shell revealed yesterday that lower earnings in its Downstream segment had partly offset increased contributions from its Integrated Gas and Upstream units.
“Debt’s still higher than we, and probably Shell, would like, and will put pressure on the group’s cash in years to come. Add capital spending demands and the promised buyback could yet prove vulnerable to a reversal in the oil price,” the analyst concluded.
Other analysts on oil major
JPMorgan Chase & Co and UBS, which sees Shell as a ‘buy,’ set price targets on the shares of 3,300p and 3,000p, respectively. According to MarketBeat, the FTSE 100 group currently has a consensus ‘buy’ rating and an average price target of 2,921.36p.