It was revealed on Thursday that Royal Dutch Shell (NYSE:
RDS.A) saw its biggest fall in eight months in London following
the discovery of a "light sheen" over 10 square miles in the Gulf
Recent oil disasters have made investors nervous and
increasingly jumpy at the mere idea of an oil spill, so even a
light sheen is going to be practically disastrous for the share
Class A shares in the company fell up to 5.5%, which
represents the most since August 9, to the lowest intraday level
since October 6.
In response to the news, Shell has deployed an oil-spill
response vessel, and it has requested flights to keep an eye on
the sheen which lies between its Mars and Ursa output areas.
According to a company representative both platforms are still
"Shell has no current indication that the sheen originates
from its wells," Shell spokeswoman Kelly Op de Weegh said.
The potential leak saw Shell fall 5% to 2.034 pence by 12:26
p.m. in London. That number brigs the company's decline for the
year to 14%.
On April 9, ValuEngine stated that it believes RDS.A should be
trading at $72.77. This makes RDS.A 5.44% undervalued. Fair Value
indicates what it believes the stock should be trading at today
if the stock market were perfectly efficient and everything
traded at its true worth.
For RDS.A, ValuEngine bases this on actual earnings per share
) for the previous four quarters of $8.51, forecasted EPS for the
next four quarters of $9.38, and correlations to the 30-year
Treasury bond yield of 3.32%. There are an additional 10 firm
specific and interest rate related parameters, each playing a
role in the valuation analysis.
Meanwhile, Canaccord Genuity said on March 26 that Shell was a
consensus Buy for much of 2011, but seems to have been ignored by
investors since early 2012 due to a combination of weak 4Q
results, a disappointing dividend and rising broad market risk
"Shell is at a markedly different point in its capital cycle
to most peers, having brought 3 key projects ($30bn of capital)
on stream in the past year."
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