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Is Royal Dutch Shell Share Price a Bargain Ahead of Q2 Earnings?

Royal Dutch Shell share price is up by 0.60% as traders wait for the company’s second quarter earnings report. The company’s class A shares are trading at 1236p, which is within the range it has been in in the past few days. Meanwhile, BP, its closest peer in the FTSE 100 is down by 0.30% to 292p.

Royal Dutch Shell Earnings Preview

Royal Dutch Shell will be the biggest company to release its earnings tomorrow. These will be the first results after the company slashed more than £18 billion in its assets in June. Analysts expect that the company’s revenue will be £53.70 billion in the quarter. That will be £7 billion lower than the £60 billion that it reported in the first quarter. Also, analysts believe that the net loss per share will increase from the previous £0.1 to £0.24.

The weak results are expected considering that the price of crude oil was relatively weak in the first weeks of the quarter. Indeed, it is in the quarter that the prices turned negative. However, analysts believe that Shell will upgrade its forward guidance considering that the price of oil has been rising as more countries reopen.

Analysts are upbeat about Royal Dutch Shell share price

In recent months, analysts have been optimistic about Royal Dutch Share Price. In a recent note, analysts at UBS reiterated their buy prediction on the firm’s share price. Those at Jefferies believe that the shares could climb to 1,360p while those at JP Morgan and Credit Suisse are more optimistic. They see the shares rising to 1,700p. HSBC analysts see the shares rising to 1,500.

Royal Dutch Shell Analysts Forecasts
Royal Dutch Shell Analysts Forecasts

From a valuation standpoint, there is a lot to like about Royal Dutch Shell. For example, the firm has a trailing PE ratio of 13, which is lower than the S&P 500 average of about 19. The firm’s return on assets of 2.4% is bigger than BPs negative return.

Royal Dutch Shell Technical Analysis

The daily chart shows that Royal Dutch Shell share price is up slightly today. But the shares are still in an overall downward trend as evidenced by the pink trendline. Also, the price is below the 50-day and 100-day exponential moving averages. The price is also below the 23.6% Fibonacci retracement level. Therefore, it seems like the bears are in total control, meaning that the price may continue falling as bears target the May 14 low of 1,171p.

On the other hand, a move above the 50-day EMA at 1,320 will invalidate this trend.

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Royal Dutch Shell Share Price forecast

Royal Dutch Shell Share Price

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