Berenberg Expects 'Exceptional' Q2 for Shell After Outlook Update

Berenberg maintained its buy rating on Shell (SHEL.L, SHELL.AS), noting that the British oil and gas giant's recently published outlook update for the second quarter points to an "exceptional" three-month period. "We believe that the company will deliver exceptional cash flow in Q2 and is well positioned to benefit from ongoing high LNG prices in Q3 as Europe continues to refill gas inventories. Our base case is that the buyback is maintained at $3bn per quarter through 2026, but strong cash flow generation raises the possibility that the buyback could be raised back to $3.5bn for a period," analysts in a note published Thursday. Berenberg made "minor" adjustments to its earnings forecasts, including nudging up its adjusted EPS projections by 0.3% for 2026 and 0.1% for both 2027 and 2028. The price targets of 40 pounds sterling and 46 euros, respectively, for its for London-listed and Amsterdam-listed shares were left unchanged. Shell is scheduled to release its second-quarter results on July 30.