BUZZ-MS, Citi bullish on big oil cos, but differ on Shell

** Citigroup says integrated oil companies (IOCs) shouldnot be judged only on their improving shareholder returns, butalso by their "deconstructed synthetics"

** Says the intrinsic value of IOC upstream businesses iscurrently at 5.3x 2020E EV/debt-adjusted cash flow vstraditional U.S. E&P companies trading at 5.7x

** Upgrades BP and Repsol to "buy", joiningChevron, Exxon and ConocoPhillips

** Cuts Statoil to "sell" to join Shell,saying ratings reflect concerns over portfolio-shortfall thatare not factored into valuation

** Morgan Stanley's says its analysis shows the 'Big 5'could generate ~$17 bln FCF in Q1, highest level in seven years

** Yet, MS notes, the sector has not outperformed asinvestor sentiment stays low and European majors seen as a"show-me" story, as far as FCF growth is concerned, after a weakQ4

** MS says weak cash generation in Q4, especially vs. Q2 andQ3, resulted in sector's underperformance, particularly Shell's;but expects "the reverse will happen" post Q1 2018

** MS rates Shell and Total "overweight" are bothare among its top picks

** But, Citi also cautions that while rising FCF maytranslate into higher shareholder returns, investors should notethe industry is probably operating under sustainably low capex(Reporting by Jasmine I S in Bengaluru)