Shell to Invest $667.8m in Raízen JV as Citi Hikes Price Target to 2,950 GBp
Citi raised Shell’s price target to 2,950 GBp from 2,700 GBp while maintaining a Neutral rating citing Middle East tensions bolstering energy valuations. The company will inject 3.5 billion reais ($667.8 m) into Raízen to stabilize the sugar-ethanol joint venture after losses and heavy capex drove net debt and leverage sharply higher.
1. Price Target Revision
Citi increased Shell’s price target from 2,700 GBp to 2,950 GBp and retained a Neutral rating, citing that Middle East geopolitical tensions underpin energy sector valuations and provide support for global oil majors’ earnings stability.
2. Raízen Recapitalization Plan
Shell will invest 3.5 billion reais ($667.8 m) into Raízen, its Brazilian sugar-ethanol and fuel distribution venture, to shore up the balance sheet after repeated losses driven by heavy capital expenditures and adverse weather reduced agricultural yields and increased net debt.
3. BP Board Restructuring and Ex-Shell CFO Departure
BP’s chairman is trimming the board to streamline governance, leading to the exit of Simon Henry, Shell’s former CFO, from BP’s board, reflecting broader shifts in leadership across major energy firms.