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Shell share price: Analysts weigh in on oil major after Q4 and FY results

Interactive Investor reckons that Royal Dutch Shell’s (LON:RDSA) full-year results show the benefits of its streamlining, which will also help the group weather the oil price downturn, Citywire reports. The comments follow the Anglo-Dutch company’s update yesterday when the oil major’s profits beat forecasts.

Investors cheered the update sending Shell’s share price 3.78 percent higher to close at 2,362.00p. The group’s shares lent support to the benchmark FTSE 100 index which ended trading 0.39 percent higher at 6,968.85 points. This morning, the shares have retreated and as of 08:11 GMT were trading 0.51 percent lower at 2,350.00p, as compared with a 0.23-percent gain in the Footsie.

Interactive Investor weighs in

Citywire quoted Interactive Investor analyst Richard Hunter as commenting yesterday that Shell had reported a 34-percent rise in earnings per share over the year after disposal of non-core assets and “prodigious cash generation enabled the maintenance of the dividend”. While the oil prices have weakened, the analyst notes that the company ‘has been there before’.

“Any further weakness in the oil price will need to be managed carefully and, longer term, capital expenditure will be a continuing drain as the company looks to explore alternative energies as the power landscape changes,” Hunter pointed out.

Other analysts on Shell

Reuters meanwhile quoted Rob West, analyst at Redburn, as saying that Shell’s cash flow was incredible’.

“It’s heavily flattered by downstream inventory liquidation, but it still squashes any lingering worries about debt and dividend coverage,” the analyst continued adding that his view was that the Anglo-Dutch group “could create a lot of value for investors by upping investment and returning to growth mode”. Redburn has a ‘neutral’ rating on Shell.

As of 08:19 GMT, Friday, 01 February, Royal Dutch Shell Plc 'A' share price is 2,350.00p.

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