ROYAL DUTCH SHELL
S&P Capital IQ upgraded its recommendation on the oil giant from “hold” to “buy” after the firm announced it was ceasing further exploration activity off the coast of Alaska for the foreseeable future following disappointing drilling results in the region. The broker said it believes the move is warranted given the prolonged weakness in the oil price and its earnings estimates remain unchanged.
Cantor Fitzgerald upgraded its rating on the company from “sell” to “hold”. The broker noted that the group’s share price is down by 58 per cent since it initiated coverage in June, and therefore it now sees “the shares fairly valued at the current price”. It did warn, however, that if oil prices continue to fall, there is a further potential risk of dilution as Tullow may need to recapitalise.