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Financial Times: Conservatively we think Shell is worth around $385bn

By Neil Hume and Robert Orr
Published: June 29 2007 03:00 | Last updated: June 29 2007 03

Royal Dutch Shell was the stand-out feature in the oil sector. It shares gained2.6 per cent to £20.60 after Morgan Stanley claimed the company was undervalued by a staggering $120bn (£60bn).

Upgrading it to an “equal weight” recommendation and setting a £23 target price, the broker said a detailed sum-of-the-parts valuation exercise had uncovered a significant valuation gap.

“Conservatively we think Shell is worth around $385bn, which is 45 per cent higher than the current enterprise value of the company,” said the broker.

“If you accept our upstream valuation, then the non-upstream businesses [refining, marketing, gas and power and chemicals] are currently on a price/earnings ratio of 3.6.”

The strong crude price helped BP gain 2 per cent to 599p, while BG Group advanced 2.7 per cent to 813p.

Above is extract from FT article headlined: Talk of Tchenguiz stake-building lifts William Morrison and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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