RDSA-NLD - Embedded Expectations Analysis - 2018 10 01
Royal Dutch Shell plc (RDSA:NLD) currently trades near recent averages relative to UAFRS-based (Uniform) Assets, with a 1.0x Uniform P/B. At these levels, the market is pricing in bullish expectations for the firm, and management is confident about their expansion on the Mexican side of the Gulf, their integrated gas business, and their reduced costsSpecifically, management is confident about the advantages they have in their existing power trading position, their retail and gas businesses, and that they are delivering on their commitments to shareholders. Additionally, they are confident that the nine blocks they won on the Mexican side of the Gulf are nearly 3x larger than their existing position in the U.S portion of the Gulf, and that their progress in reducing their expected unit development cost and project breakeven prices is feeding through into a portfolio of competitive options in Upstream. Also, they are confident about their increased earnings from their integrated gas business
Royal Dutch Shell is a holding company. Through its subsidiaries, Co. is engaged in the oil and gas industry. Co. reports its business through four segments: Integrated Gas, which engaged in the liquefaction and transportation of gas and the conversion of natural gas to liquids to provide fuels and other products; Upstream, which engaged in the exploration for and extraction of crude oil, natural gas and natural gas liquids; Downstream, which engaged in oil products and chemicals manufacturing and marketing activities; and Corporate, which comprising Co.'s holdings and treasury organisation, its self-insurance activities and its headquarters and central functions.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.