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Shell share price: Analysts weigh in on group’s results

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Russ Mould, investment director at AJ Bell, argues that the reaction at Royal Dutch Shell’s (LON:RDSA) latest results indicates that oil companies are still at the mercy of fluctuations in oil prices, Proactive Investors reports. The comments came as the Anglo-Dutch energy giant updated investors on its third-quarter performance, posting higher earnings, but falling short of analyst expectations.

Shell’s share price fell in the previous session, giving up 3.04 percent to close at 2,424.50p. The fall weighed on the benchmark FTSE 100 index which gave up 13.44 points to close 0.19 percent lower at 7,114.66. This morning, the shares have inched marginally higher, trading 0.16 percent up as at 08:20 GMT, compared with a 0.78-percent gain in the Footsie.

AJ Bell weighs in on Shell

Proactive Investors quoted Russ Mould, investment director at AJ Bell, as commenting that the previous session’s reaction to “a 37-percent increase in third-quarter profit from Royal Dutch Shell offers a reminder that oil and gas companies, no matter how well they are performing, are still at the mercy of fluctuations in oil prices”.

“Markets are forward-looking, and Shell’s results were delivered against the backdrop of oil trading at multi-year highs,” Mould continued, adding that this might not be the case in the final part of the year.

“Combined with the negative impact of the falling oil price there are other factors which may explain the lukewarm reaction to the update,” the analyst elaborated.

Other analysts on group

Credit Suisse reaffirmed Shell as an ‘outperform’ yesterday, without specifying a price target on the shares. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 2,973.67p.

As of 08:14 GMT, Friday, 02 November, Royal Dutch Shell Plc 'A' share price is 2,428.50p.

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