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Daily Telegraph: Royal Dutch Shell enjoys City upgrades

By Yvette Essen, Stock Markets Reporter
Last Updated: 12:11pm BST 29/06/2007

Royal Dutch Shell was the subject of a second bullish note in as many days, causing the shares to become one of the biggest blue-chip risers in a unsettled market.

Credit Suisse repeated its outperform rating on the shares, saying: “Although much of the earnings gap between consensus and our own forecasts has now closed, we believe management still has more options to maximise shareholder value and that the shares look too cheap.”

The note comes hot on the heels of positive comments from Morgan Stanley, which yesterday calculated that Shell is undervalued by $120bn (£60bn).

Gains by Shell were also fuelled by continuing strong oil prices, causing the stock to rise 1.1pc to £20.81 while BP put on 0.9pc to 604p.

The FTSE 100 fell 32.2 to 6539.1 and the FTSE 250 dropped 70.5 to 11448 in early dealings. In a subdued market, telecoms group BT was one of the largest blue-chip risers, up just 1.2pc at 333p.

The property stocks came in for some weakness as fears mounted that another interest rate rise could be on the cards. Segro fell 3.5pc to 615p, Liberty International shed 2.2 pc to £11.47 and Hammerson slipped 1.6pc to £14.36. It was a similar tale for property companies and estate agency businesses in the FTSE 250, with Quintain Estates dropping 3.2pc to 797p, Brixton shedding 2.3pc to 433p and Savills falling 3.87pc to 571p.

On the upside was software company Micro Focus International, as analysts digested yesterday’s full-year results.

The shares rose 2pc to 255p with Goldman Sachs upgrading the shares from sell to neutral and lifting its target price from 225p to 265p. The broker spelled out: “Our view on the company has not significantly changed; however, we now believe the company’s 7pc organic revenue growth guidance for 2008 carries some upside risks while operating margins should remain stable.”

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/06/29/bcxmktrep129.xml

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