Berenberg has raised its target price for Shell plc following the oil major's strong third-quarter results last week, hailing the company's "attractive" free cash flow and balance sheet strength.
The broker lifted its target price from 3,000p to 3,250p and reiterated a 'buy' rating on the stock.
Shell's third-quarter results were "solid", Berenberg said, after adjusted net earnings came in 7% ahead of consensus, helped by improved production and strong results from the Integrated Gas arm.
Cash generation was also strong, enabling the company to keep its $3.4bn share buyback for the fourth quarter while also cutting net debt by $2bn.
"Shell has the lowest gearing of the major European integrated companies, which gives it more potential to lean on the balance sheet to maintain buybacks in a more challenging macro environment," the broker said.
"We expect the liquefied natural gas (LNG) market to remain tight through 2026 with prices remaining high, and with European gas inventories relatively low today, there is a risk of European gas price spikes over the winter that could also open attractive trading opportunities for Shell."
Shares were up 0.2% at 2,853p by 1220 GMT.