Oil giant Shell (SHEL) is set to report Q4 earnings next week. The stock is up just 4% this year as it is battered by volatile oil prices.
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Accroding to TipRanks’ Options Tool, options traders expect about a 3.07% move in either direction in SHEL stock in reaction to its Q4 results.
What Does Wall Street Expect?
Wall Street expects Shell to report Adjusted EBITDA of $56 billion, down from $65.8 billion a year ago. Adjusted earnings per share is tipped to come in at $3.17, down from $3.73. Will Shell beat these estimates?
As can be seen below, it has a strong track record of doing just that.
Key Issues Ahead of Earnings
Shell has already revealed that its trading results for the quarter will come in “notably below” the strong performance in the previous three months, particularly in oil and refined products trading.
It noted that its chemicals and products unit will report an adjusted loss for the quarter, driven by weaker margins and a non‑cash deferred tax adjustment. Chemicals margins are expected to fall to about $140 per metric ton from $160 in the third quarter, reflecting ongoing softness in global demand and excess supply in the market.
Further, the company narrowed its liquefied natural gas (LNG) production outlook to 7.5 million to 7.9 million metric tons, compared with its earlier range of 7.4 million to 8 million tons.
Despite the weaker trading backdrop, Shell’s upstream operations remain broadly stable. The company expects production of 1.84 million to 1.94 million barrels of oil equivalent per day, roughly in line with the previous quarter’s output.
Shareholders will keep a close eye on capital expenditure, both for 2025 and 2026, in comparison to 2024’s $19.6 billion in spending. Key projects include oil, gas and liquefied natural gas (LNG) projects in the Gulf of Mexico, Brazil and Canada.
According to AJ Bell, Shell’s fourth-quarter buyback programme was slated to be $3.5 billion. In total the company probably returned something like $22.5 billion in cash to shareholders, or almost 11% of its current stock market capitalisation.
“Despite all of the doom and gloom surrounding oil and gas prices, Shell’s shares are not too far away from their all-time highs. This may be partly down to boss Wael Sawan’s ongoing focus on keeping costs, capex and debt down and his focus on maximising the value of Shell’s hydrocarbon assets and balancing that with investment for future growth from renewables,” said Danni Hewson, AJ Bell head of financial analysis.
Is SHEL a Good Stock to Buy Now?
On TipRanks, SHEL has a Moderate Buy consensus based on 6 Buy and 4 Hold ratings. Its highest price target is $92.50. SHEL stock’s consensus price target is $76.73, implying a 0.42% upside.
