Shell upgraded to Buy at UBS with ‘too much free cash flow too ignore’

UBS analyst Joshua Stone upgraded Shell (SHEL) to Buy from Neutral with a price target of 3,000 GBp, up from 2,800 GBp. Shell now has the safest buyback in the sector, supported by a strong balance sheet, and the firm thinks cost savings represent a $6B potential opportunity, the analyst tells investors in a research note, adding that there is “too much free cash flow to ignore.” UBS says Shell’s stock now screens as too cheap versus peers, and with its strategy starting to converge to the U.S. majors, there is the potential for some of the gap to close.