Morgan Stanley downgraded Shell PLC to Equalweight from Overweight on Wednesday. The bank cited a less pronounced upside compared to industry peers in the current rising price environment. Shell shares have climbed 27% over the last six months.
Analysts noted that Shell’s defensive qualities, including its diversified earnings and strong LNG position, are now less differentiated. The firm’s growth outlook appears less distinct than rivals with deeper upstream portfolios.
Morgan Stanley expects Shell’s free cash flow growth per share to depend on cost-saving measures and share buybacks. While the bank raised its price target to reflect broader market changes, the downgrade indicates a cautious stance on relative performance.