By Shadia Nasralla and Stephanie Kelly LONDON, May 7 (Reuters) - Shell's first-quarter profit beat estimates and hit its highest in two years at $6.9 billion on Thursday, boosted by gains linked to the Middle East war,

Shell PLC (LSE:SHEL, NYSE:SHEL) could see as much as 37% upside, according to Jefferies, despite investor unease over the oil major’s shareholder returns mix. In a note, the broker repeated a 'Buy' rating and a £44 price target after the group’s first-quarter call.

Earnings more than doubled—helped by oil trading and higher prices—but the energy major warned of lower production, launching a lower buyback than in previous quarters.

The huge jump in earnings has some calling the company a war profiteer

The oil giant’s earnings in the first three months of the year were more than double the previous quarter’s and follow similarly strong results of European rivals.

The transaction will add roughly 370,000 barrels of oil equivalent per day to Shell's portfolio and is designed to boost the firm's long-term production.

A shell corporation is an entity that exists primarily to hold funds and manage financial transactions without conducting active business operations. Legitimate reasons a shell corporation might exist include startups that use the business entity as a vehicle to raise funds, conduct a hostile takeover, or to go public.