Shell share price: Morgan Stanley trims rating after results

Analysts argue ‘overweight’ case no longer supported

Shell share price: Morgan Stanley trims rating after results

Analysts at Morgan Stanley have trimmed their rating on Royal Dutch Shell (LON:RDSA), pointing to below-par results for the past two quarters, WebFG News reports. The comments came after the Anglo-Dutch oil major recently updated investors on its performance, with profits falling short of analyst expectations.

Shell’s share price has been little changed in today’s session, having inched 0.02 percent higher to 2,532.00p as of 13:14 BST, underperforming the broader UK market rally, with the benchmark FTSE 100 index currently standing 0.85 percent higher at 7,640.39 points. The group’s shares have added more than 16 percent to their value over the past year, as compared with about a 2.3-percent gain in the Footsie.

Morgan Stanley trims stance on Shell

Morgan Stanley lowered its rating on Shell to ‘equal weight’ yesterday, arguing that its ‘overweight’ case was no longer supported. The broker further trimmed its price target on the shares from 3,160p to 2,860p.

“Recent quarterly results have come in below our expectations,” the analysts said in a note to clients, as quoted by WebFG News, adding that while the group’s free cash flow and gearing were still set to improve, it was no longer in a ‘differentiated manner’. The broker further pointed out that Shell’s dividend growth was now lagging behind peers, while the oil major’s buyback had started “but at a lower-than-expected” pace.

Other analysts on Anglo-Dutch group

Goldman Sachs, which sees Shell as a ‘buy,’ set a price target of 3,130p on the shares today, while earlier this week, Sanford C. Bernstein, which also rates the group as a ‘buy,’ set a valuation of 3,300p. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 2,925.31p.

As of 13:47 BST, Friday, 03 August, Royal Dutch Shell Plc 'A' share price is 2,531.50p.

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