The Royal Dutch Shell share price is in a divergent path. The RDSA and RDSB shares have retreated by almost 4% even after a series of positive news including the super-high oil prices and the recent dividend boost. The stock is at the same level where it started the year at. The same is true with the BP share price, which is down by more than 6% in the past few days.
Royal Dutch Shell news. Shell, the oil and gas supermajor, has made headlines in the past few days. The most notable one was last week, when the company announced that it will boost shareholder returns. The company expects to increase its returns by between 20% and 30% of cash flow starting from later this month. The firm will deliver its quarterly results on July 29th. The boost of dividends comes as the company tries to make amends with investors after it slashed its payout last year.
Shell also made headlines after it decided to join a clean hydrogen project in Norway. The project is being led by Aker Clean Hydrogen. It works by producing hydrogen from natural gas while capturing emissions. It also unveiled a new carbon capture project in Canada’s Alberta province. Another headline is that the company decided to sell its Schwedt refinery stake in Germany later this year.
While the Shell share price has struggled, analysts are optimistic about its performance. For example, those at Barclays, Goldman Sachs, RBC, Credit Suisse, JP Morgan, and UBS believe that the shares will rise to more than 1,900p, as shown below. This is notable since the stock is currently trading at 1,417p. A DCF valuation that looks at future cash flows shows that the stock is undervalued by about 36%.
Shell share price forecast
The four-hour chart shows that the RDSB share price has been under intense pressure lately. Along the way, the shares have created a rising wedge pattern that is usually a bearish signal. On the positive side, this wedge has a long way to go to get to its convergence zone. It is also along the 25-day and 50-day moving average.
Therefore, the shares will likely bounce back as investors target the upper side of the wedge pattern at 1,475p. On the flip side, a drop below 1,400p will signal that there are still sellers in the market.
RDSB shares chart
Follow Crispus on Twitter.