Royal Dutch Shell - opinions

Investing
#1

What is going on with this stock, yes I know about the write down of their assets and oil demand being down but as we approach Autumn and re-opening after COVID oil is increasing in value. This stock just keeps falling and falling - broker alerts are all look to be ok even if some slight downgrades but they are still way above current price

Date Broker Recomm. Price Old Target New Target Notes
26 Aug Barclays Capital Underweight 1,080.60 1,500.00 - Downgrades
31 Jul Berenberg Hold 1,080.60 1,440.00 1,450.00 Reiterates
15 Jul JP Morgan Cazenove Neutral 1,080.60 1,650.00 1,700.00 Reiterates
11 Jul Morgan Stanley Equal weight 1,080.60 1,050.00 - Downgrades
02 Jul Barclays Capital Equal weight 1,080.60 1,500.00 - Reiterates

Would you hold if you invested ie wait 2-3 months as at present this stock hasnt been anything for months now. It’s got cob webs on it!

Cheers

Paul

#2

Lot of funds are shifting focus to renewable energy. That is what most investors want. More and more people don’t want to invest in polluting companies anymore.

#3

Buy, stupid price. This will boom back. Reductions in CAPEX and insolvency in sector will cause this to boom. Yes transition is taking place, will this happen overnight no. I am confident on Shell my biggest stake hands down. The beauty of this is every is going tech mad and its letting me invest more and more at these stupid rates.

Ask yourself, is this an event? Or has Covid changed how we operate… I think the former.

Not financial advice but that’s my opinion. Plus oil majors will lap up renewables they already are and shell have gone into utilities further diversifying their vertical integration. American companies will suffer more due to oversupply of WTI so I’d go for MNC or outside US.

N.B. even if shell only reinstate their dividend by 80pc it’s former rate price will increase guaranteed from that as institutions buy back.

#4

Shell have the network of site etc so renewable sources to consumers eg EV and hydrogen pumps. They seem to still be heavily involved with gas which I dont think will change although it is is cleaner than oil. Hydrogen is the future so I suspect they are planning transition to that - if so they still remain a major power provider to business and residential. I read today that Tesla mentioned the possibility of batteries to power aeroplanes in 3 years but I dont think we will have enough raw materials for that level of battery production. My main concern is definitely the Road to Zero where GB has to be carbon neutral in transport by 2035 - that means less vehicles and transport being powered by fossil fuels - so Shell has to evolve into new forms of providing power. Hopefully they will return to strength. But basically I feel I have an oil stock, I need to believe for the long term I have a power stock. Appreciate your comments.

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#5

Who’s to say carbon neutralising infrastructure can’t be implemented like in iceland…Oil is back in the game.

#6

Shell took over First Utility in Feb 2018 so have an electricity firm. Tiny percentage of market share at present in the UK at present - think its something like 2% - but aim to be the biggest firm in 5 years.

#7

Shell was a dividend aristocrat but they cut it for the first time since WWII. So a dip down was expected, later they had to write of billions. This al was more then expected.
It is expected that Shell will have the best liquidity in the market because of the dividend cut. The biggest question might be, what will they do with it?

I’m kind of hoping that it will be used for a more renewable future, possibly by buying renewable energy company, energy storage or getting back to dividend levels pre-covid.

I believe Shell will get back to higher stock prices in the next 12 months but it will take time. Shell is my biggest holding (exempt 2 Etf’s) Shell should be able to make up the -13% I’m on. But I’m not buying more at the moment because I want some more spread & balance and I believe that other stock’s can get me more profit in a shorter time.

Edit: currently there also is storm Laura (or hurricane) that has effect on the oil rigs an refineries in the gulf of Mexico. Possibly increasing the oil price a little bit but holding down shell and other stocks.

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#8

Good feedback, I am in negative on Shell but can hold. I don’t think we will see oil hit $45 a barrel this year so it could take a while for Shell to grow - I do think they may acquire a smaller oil company that is getting hit hard from the pandemic. Oil is strange - I have been trading a lot of the WTO Crude Oil ETF (OD7F) as there was a lot of volatility but even now this seems to have just remained constant over the last week so oil seems flat at present. If they do evolve into a multiple fuel source provider - solar / electric / hydrogen / wind -then I will be happy to hold long term.

#9

Shell is my biggest holding at 7.5% of my portfolio. I was down about 14% on it, but added more today to cost-average. The dividend cut earlier in the year makes it’s growth potential huge, IMO – if they use that extra cash to follow through with their green/renewables plans

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#10

I’m of the same mind. I think if they rebase the dividend and reinvest, this will prove to be an excellent entry position.

#11

As others have noted investing in Shell is like investing in today’s oil and gas but in tommorows hydrogen, electricity and chemicals. I believe with the big upcoming reorganisation they will transition into a new kind of energy company. Shell already has been buying several utilities and selling refineries and upstream assets. I hope they use the cash which has become available trough cutting the dividend and buyback programs to fund the transition and create industry leading margins and profits again. I notably believe a lot in hydrogen for energy storage but we’ll see when that becomes a thing.

I personally hold 0.9% of my portfolio directly in Shell.