Shell hiked to Buy from Sell at Goldman Sachs

|By:, SA News Editor

Royal Dutch Shell (RDS.A, RDS.B) is upgraded to Buy from Sell with a $71 price target at Goldman Sachs despite the stock's poor performance during the past year as the company let earnings fall under the weight of heavy depreciation and exploration expense.

The firm believes Shell's underlying business is sound and highly cash generative, with higher exposure than peers to long-lived assets and slightly better production/cash flow growth in the coming years.

New management is likely to steer the company toward reducing expenses and selling assets, Goldman adds.

Shares flat premarket, as Shell also reports its intention to sell its assets in Texas' Eagle Ford shale.