Shell (SHEL – Research Report), the Energy sector company, was revisited by a Wall Street analyst today. Analyst Jason Gabelman from TD Cowen maintained a Buy rating on the stock and has a $82.00 price target.
Jason Gabelman has given his Buy rating due to a combination of factors, including Shell’s increased distribution guidance, which highlights the company’s confidence in its financial outlook. The decision to raise distribution targets from 30%-40% to 40%-50% of cash flow from operations (CFFO) at a $50 per barrel oil price demonstrates Shell’s commitment to returning value to shareholders, even if it means leveraging its balance sheet.
Moreover, Shell’s strong financial position and the potential for durable earnings are expected to support continued returns. Despite some concerns regarding the Integrated Gas and Upstream segments, Shell’s proactive approach to optimizing low-return areas and its focus on maintaining a robust cash flow outlook through the 2030s are positive indicators. The company’s guidance on free cash flow per share growth and reduced capital expenditure further solidify the Buy rating, as they suggest a strategic focus on efficiency and shareholder value.
In another report released yesterday, Wells Fargo also maintained a Buy rating on the stock with a $87.00 price target.