Today I’ll be discussing the outlook for oil giant Royal Dutch Shell (LSE: RDSB), aero-engine maker Rolls-Royce (LSE: RR) and media firm WPP (LSE: WPP). Are there any tempting bargains amongst these three shares?

Income play

Oil & gas giant Royal Dutch Shell received a nice little boost last week when Goldman Sachs reiterated its buy recommendation on the stock. The US investment broker confirmed its positive stance with an improved target price of 2,094p.

Shares in the Anglo-Dutch company have been enjoying a nice rally since January, trading 40% higher than three months ago so is it too late to buy into the stock, or is this just the start of a major turnaround? Consensus earnings forecasts have been revised downwards throughout the year, and the market now expects Shell’s underlying profits to shrink by 37% this year, with a strong rebound in the region of 86% in 2017. This would leave Shell trading on a price-to-earnings ratio of 25 this year, falling to a more palatable 14 next year.

In my humble opinion, the shares are still not cheap enough to buy for capital growth alone, but the chunky dividend forecasts in excess of 7% should make them irresistible for income. As usual, it’s best to drip-feed into the stock to counteract any share price volatility.

Big deal

Investors in Rolls-Royce had plenty to cheer on Tuesday when it was announced that it had signed an agreement with the national airline of Indonesia to upgrade some of its fleet. During a two-day visit by the Indonesian president, the firm signed a deal with Garuda Indonesia, along with Airbus, to upgrade the fleet’s 14 Airbus A330s to the newer A330neo. It wasn’t revealed how much of the £4bn deal was attributable to Rolls-Royce.

The last couple of years have been difficult for Rolls, with falling revenues and earnings, and the shares have suffered as a result. Unfortunately the forecast for this year is no better. Analysts are predicting a 56% drop in earnings this year, followed by a 32% rebound in 2017. At current levels the shares are trading on 27 times forecast earnings for this year, falling to 20 next year. The shares are still at a premium, and I wouldn’t rule out further declines.

Shopping spree

Advertising and public relations firm WPP has been busy shopping this week. On Tuesday it bought the remaining stake in Athens-based market research agency TNS ICAP that it didn’t already own, then on Wednesday went on to buy a majority stake in Turkish communications firm Effect PR.

Last month, the FTSE-100 firm released an encouraging set of full-year results, reporting a 6.1% rise in revenue to £12.2bn, coupled with a 10% increase in underlying profits. The media firm has been growing steadily over the last decade, with revenue rising every year since 2005, and analysts are expecting more of the same in 2016. Our friends in the City are talking about a 10% rise in earnings to £1.35bn, followed by a further 8% improvement to £1.47bn next year.

WPP trades on a forward price-to-earnings ratio of 16 for the current year, falling to 15 for the year ending 31 December 2017. The P/E rating is on a par with historical levels, and in my opinion the shares are fully-valued. So no bargains here I’m afraid.

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Bilaal Mohamed has no position in any shares mentioned. The Motley Fool UK has recommended Royal Dutch Shell B. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.