Shell Downgraded by Morningstar

FTSE 100 oil giant has lost its economic moat and has had its fair value slashed because of uncertainty over the company's plans for the low-carbon transition

James Gard 23 June, 2021 | 12:24AM
Facebook Twitter LinkedIn

Shell logo at a petrol station

Oil giant Shell (RDSB) has been downgraded and stripped of its economic moat by Morningstar analysts, who blamed the ESG uncertainty overhanging the sector and lower expectations for oil prices over the next decade. The FTSE 100 company now has no economic moat and its fair value estimate has been lowered from £22 per share to £19.40 per share. This means the company has moved from being a 5-star to a 4-star stock, but that means it is still undervalued at around £14 per share currently.

The stock was the first of our new video series on undervalued UK stocks. Last year it cut its dividend for the first time since the second world war as oil prices plunged, and this had a big impact on UK income seekers. Since then the oil price has rebounded sharply as people get back in their cars again, and the company has proposed an increase to its dividend.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

James Gard  is content editor for Morningstar.co.uk