Shell: Berenberg maintains 'hold' after capital plans

(CercleFinance.com) - Berenberg maintains its "hold" rating on the Shell share, with a target price of 31 euros, after the oil giant committed itself to returning 125 billion dollars to its shareholders through dividends and share buybacks over 2021-2025.


The plan represents around an annual return of 10%, the German broker says, which is in line with the group's current distribution of 25 billion dollars per year, with dividend payments around 15.5 dollars and 10 billion dollars of share buybacks.

"This commitment to shareholder returns should be attractive, particularly to income funds," Berenberg says.

Shell has also stated that it will look at dividend increases, Berenberg notes, expecting a payout rise to be delivered in 2020.

Regarding the increase in capex to an average of 30 billion dollars a year, it is "likely ahead of expectations," Berenberg points out.

"The shares have performed well into the event today, and we view the outcome as being largely priced in at the current levels," it wrote in a note to clients.

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