Shell faces what amounts to an almost existential crisis
Analysts Downgrade Troubled Shell
Given Mornigstar’s view that long-term oil prices will be well below $100 going forward, we don’t believe Shell’s has a lasting competitive advantage over its peers
Stephen Simko, CFA 27 May, 2015
Shell (RDSB) faces what amounts to an almost existential crisis: even when oil prices were $100 its portfolio was strewn with problems. Huge bets on shale destroyed huge amounts of capital, cost overruns on key projects such as the Motiva refinery, and a chronically poor-performing downstream all combined to leave the company with very weak returns on capital.
We have recently lowered our Shell fair value estimate to £20.50 per share from £21 per share to reflect what we believe was an overpayment with respect to its planned acquisition of BG Group.
The TRUTH will set you FREE.
No comments:
Post a Comment