Shell Plc’s (LSE:SHEL, NYSE:SHEL) second-quarter update has pushed brokers to raise forecasts, with Citi lifting its EPS estimate by 13% and Jefferies increasing its earnings forecast by 14% to around US$9 billion.
Citi said the statement was “incrementally positive”, with the main upside coming from downstream
It pointed to strong oil trading, a rebound in chemical margins linked to the Gulf crisis and resilient fuels marketing margins. The broker cautioned that these were “essentially temporary to the quarter”, though cash flow should also benefit from derivatives, tax-lag effects and working capital release. Jefferies was also upbeat, raising its cash-flow estimate before working capital by 16% to more than US$18 billion, helped by stronger Integrated Gas volumes, lower costs and “significantly higher” trading and optimisation.
The broker reiterated its Buy rating and £45 price target, implying about 49% upside from £30.11. Shell is an integrated oil and gas group spanning Integrated Gas, Upstream, Marketing, Chemicals & Products, and Renewables and Energy Solutions