Shell (SHEL) AI Stock Analysis

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Shell

(NYSE:SHEL)

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Outperform 74 (OpenAI - 4o)

Rating:74Outperform

Price Target:

$80.00

▲(10.93% Upside)

Shell's overall stock score reflects a solid financial foundation and strong earnings call performance, highlighting resilience and strategic progress. However, technical analysis indicates short-term weakness, and valuation metrics suggest limited upside potential. Challenges in revenue growth and profitability also weigh on the score.

Positive Factors

Operational Efficiency

Shell's significant cost reductions enhance operational efficiency, contributing to long-term profitability and competitiveness in the energy sector.

LNG Market Expansion

The LNG Canada project strategically positions Shell for growth in the LNG market, leveraging a shorter transit route to Asia and expanding its market reach.

Marketing Segment Performance

Strong performance in the marketing segment, particularly in Mobility and Lubricants, indicates robust demand and effective market strategies, supporting revenue stability.

Negative Factors

Revenue Growth Challenges

Negative revenue growth reflects challenges in generating sales, potentially impacting Shell's ability to sustain long-term growth and profitability.

Chemicals Segment Weakness

Persistent issues in the Chemicals segment, including weak margins and operational disruptions, may hinder Shell's overall profitability and growth prospects.

Free Cash Flow Decline

A decline in free cash flow growth indicates potential challenges in cash generation, which could constrain Shell's ability to invest in future growth opportunities.

Shell (SHEL) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$204.70B

Dividend Yield3.96%

Average Volume (3M)3.69M

Price to Earnings (P/E)15.8

Beta (1Y)0.26

Revenue Growth-5.75%

EPS Growth-20.18%

CountryUS

Employees96,000

SectorEnergy

Sector Strength52

IndustryOil & Gas Integrated

Share Statistics

EPS (TTM)1.44

Shares Outstanding2,908,700,000

10 Day Avg. Volume5,020,556

30 Day Avg. Volume3,690,444

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap1.25

Enterprise Value/Revenue0.94

Enterprise Value/Gross Profit6.34

Enterprise Value/Ebitda4.83

Forecast

1Y Price Target

$78.79

Price Target Upside9.25% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering11

Shell Business Overview & Revenue Model

Company DescriptionShell plc operates as an energy and petrochemical company Europe, Asia, Oceania, Africa, the United States, and Rest of the Americas. The company operates through Integrated Gas, Upstream, Marketing, Chemicals and Products, and Renewables and Energy Solutions segments. It explores for and extracts crude oil, natural gas, and natural gas liquids; markets and transports oil and gas; produces gas-to-liquids fuels and other products; and operates upstream and midstream infrastructure to deliver gas to market. The company also markets and trades natural gas, liquefied natural gas (LNG), crude oil, electricity, carbon-emission rights; and markets and sells LNG as a fuel for heavy-duty vehicles. In addition, it trades in and refines crude oil and other feed stocks, such as low-carbon fuels, lubricants, bitumen, sulphur, gasoline, diesel, aviation fuel, and marine fuel; produces and sells petrochemicals for industrial use; and manages oil sands activities. Further, the company produces base chemicals comprising ethylene, propylene, and aromatics, as well as intermediate chemicals, such as styrene monomer, propylene oxide, solvents, detergent alcohols, ethylene oxide, and ethylene glycol. Additionally, it generates electricity through wind and solar resources; produces and sells hydrogen; and provides electric vehicle charging services. The company was formerly known as Royal Dutch Shell plc and changed its name to Shell plc in January 2022. Shell plc was founded in 1907 and is headquartered in London, the United Kingdom.

How the Company Makes MoneyShell generates revenue primarily through the exploration and production of oil and gas, which includes upstream activities such as drilling and extraction. The company also earns significant income from refining and marketing oil products, including gasoline, diesel, and jet fuel. Additionally, Shell has a growing portfolio in renewable energy, which contributes to its revenue through power generation and sales of renewable energy solutions. The company's extensive network of service stations and retail operations further enhances its earnings by providing fuel and convenience products to consumers. Strategic partnerships, such as joint ventures with other energy companies and investments in technology for carbon capture and storage, also play a crucial role in enhancing Shell's revenue streams and positioning it within the evolving energy landscape.

Shell Key Performance Indicators (KPIs)

Any

LNG Sales Volume

LNG Sales Volume
Tracks the volume of liquefied natural gas sold, reflecting market demand, pricing power, and the company's strategic positioning in the global LNG market.

Chart InsightsShell's LNG sales volume shows a fluctuating trend, with recent growth driven by strategic initiatives like the LNG Canada start-up, which offers shorter transit routes to Asia. Despite past volatility, the company's projection of 4% to 5% growth in LNG sales aligns with its robust Q2 performance and cost reduction achievements. This growth is crucial as Shell navigates a challenging macroeconomic environment, aiming to enhance shareholder value through ongoing share buybacks and strategic expansions.

Data provided by:

Main Street Data

Shell Earnings Call Summary

Earnings Call Date:Jul 31, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Oct 30, 2025

Earnings Call Sentiment Positive

Shell demonstrated resilience and operational excellence in Q2 2025, achieving strong financial results and progressing strategically despite external challenges. Operational efficiencies, cost reductions, and strategic milestones like LNG Canada were major positives. However, the Chemicals & Products segment continued to face significant challenges, and broader economic uncertainties remain a concern.

Q2-2025 Updates

Positive Updates

Strong Operational Performance

Despite a challenging macro environment, Shell delivered robust Q2 results with adjusted earnings of $4.3 billion and $11.9 billion cash flow from operations.

Significant Cost Reductions

Achieved $800 million in cost reductions in H1 2025, totaling $3.9 billion since 2022, on track for a $5-7 billion target by 2028.

LNG Canada Milestone

Start-up of LNG Canada, with a strategic location providing a 50% shorter transit route to Asia, supporting a 4-5% growth in LNG sales.

Upstream Business Excellence

The Upstream business consistently beat consensus over the last 4-6 quarters, driven by reliability, availability, and operational improvements.

Record Marketing Performance

Marketing recorded its best Q2 results in nearly a decade, with significant contributions from Mobility and Lubricants.

Shareholder Returns

Announced a $3.5 billion share buyback program, marking the 15th consecutive quarter of $3 billion or more in buybacks.

Negative Updates

Challenging Chemicals & Products Segment

Continued weak margins and unplanned downtime in Chemicals, with a disconnect between market volatility and supply-demand fundamentals.

Chemical Market Challenges in China

Ongoing oversupply issues in China impacting chemical market margins, with uncertainty around potential policy shifts.

Negative Free Cash Flow in Chemicals

Despite cost reduction efforts, the Chemicals segment continues to experience negative free cash flow.

Geopolitical and Economic Uncertainty

Ongoing geopolitical tensions and economic uncertainty impacting trade flows, commodity prices, and margins.

Company Guidance

In the second quarter of 2025, Shell reported robust financial results despite challenging geopolitical and macroeconomic conditions. The company achieved $800 million in structural cost reductions in the first half of the year, contributing to a total of $3.9 billion since 2022, and is on track to reach a target of $5 billion to $7 billion by 2028. Shell's adjusted earnings for Q2 were approximately $4.3 billion, with $11.9 billion in cash flow from operations. Integrated Gas and Upstream segments performed well despite higher maintenance costs and weaker margins, while the Chemicals & Products segment faced challenges due to weak margins and unplanned downtime. The marketing segment delivered its best Q2 results in nearly a decade, particularly in Mobility and Lubricants. Shell announced a $3.5 billion share buyback program, maintaining a shareholder distribution range of 40% to 50% of cash flow from operations. The company also highlighted strategic progress, such as the start-up of LNG Canada, which is expected to contribute to a 4% to 5% growth in LNG sales.

Shell Financial Statement Overview

Summary

Shell demonstrates a solid financial foundation with strong operational efficiency and a stable balance sheet. However, recent periods show challenges in revenue growth and profitability, impacting overall performance. The company maintains a healthy cash flow position, but declining free cash flow growth warrants attention.

Income Statement

Positive

Shell's income statement shows a mixed performance. The company has maintained a stable gross profit margin around 14-15% in recent periods, indicating consistent cost management. However, the net profit margin has slightly declined to approximately 5% in the TTM, reflecting pressures on profitability. Revenue growth has been negative recently, with a -3.22% decline in the TTM, suggesting challenges in revenue generation. Despite these challenges, EBIT and EBITDA margins remain healthy, indicating operational efficiency.

Balance Sheet

Positive

Shell's balance sheet is robust with a low debt-to-equity ratio of 0.42 in the latest annual report, reflecting prudent financial leverage. The return on equity has decreased to 7.49% in the TTM, down from previous years, indicating reduced profitability on shareholders' equity. The equity ratio remains stable, suggesting a strong capital structure. Overall, the balance sheet reflects financial stability with manageable debt levels.

Cash Flow

Positive

Shell's cash flow statement indicates a decline in free cash flow growth by -8.24% in the TTM, highlighting potential challenges in cash generation. The operating cash flow to net income ratio is above 0.5, indicating strong cash conversion. However, the free cash flow to net income ratio has decreased slightly, suggesting potential pressures on cash flow relative to earnings. Despite these concerns, the company maintains a solid cash flow position.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	272.01B	284.31B	316.62B	381.31B	261.50B	180.54B
Gross Profit	40.42B	36.30B	36.58B	78.78B	35.85B	-12.99B
EBITDA	53.06B	54.36B	68.55B	86.60B	56.51B	2.22B
Net Income	13.60B	16.09B	19.36B	42.31B	20.10B	-21.68B
Balance Sheet
Total Assets	387.92B	387.61B	406.27B	443.02B	404.38B	379.27B
Cash, Cash Equivalents and Short-Term Investments	32.68B	39.11B	38.77B	40.25B	36.97B	31.83B
Total Debt	75.67B	77.14B	81.64B	83.80B	89.09B	108.01B
Total Liabilities	204.83B	207.44B	217.91B	250.43B	229.05B	220.73B
Stockholders Equity	181.14B	178.31B	186.61B	190.47B	171.97B	155.31B
Cash Flow
Free Cash Flow	28.69B	35.08B	31.20B	45.81B	26.11B	17.52B
Operating Cash Flow	49.06B	54.68B	54.19B	68.41B	45.10B	34.10B
Investing Cash Flow	-17.65B	-15.15B	-17.73B	-22.45B	-4.76B	-13.28B
Financing Cash Flow	-37.63B	-38.43B	-38.23B	-41.95B	-34.66B	-7.22B

Shell Technical Analysis

Technical Analysis Sentiment

Positive

Last Price72.12

Price Trends

50DMA

71.77

Positive

100DMA

69.90

Positive

200DMA

67.09

Positive

Market Momentum

MACD

-0.15

Positive

RSI

51.99

Neutral

STOCH

53.54

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SHEL, the sentiment is Positive. The current price of 72.12 is below the 20-day moving average (MA) of 72.20, above the 50-day MA of 71.77, and above the 200-day MA of 67.09, indicating a neutral trend. The MACD of -0.15 indicates Positive momentum. The RSI at 51.99 is Neutral, neither overbought nor oversold. The STOCH value of 53.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SHEL.

Shell Peers Comparison

Overall Rating

UnderperformOutperform

Sector (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
XOM	79 Outperform	488.40B	16.16	11.81%	3.46%	-3.79%	-15.46%
CVX	76 Outperform	325.90B	20.32	9.38%	4.25%	-5.02%	-23.13%
SHEL	74 Outperform	$204.70B	15.79	7.47%	3.96%	-5.75%	-20.18%
EQNR	73 Outperform	65.02B	8.26	19.62%	8.33%	1.19%	-7.87%
TTE	73 Outperform	140.24B	10.82	13.37%	5.66%	-10.73%	-36.76%
BP	65 Neutral	91.06B	147.20	0.98%	5.46%	-7.40%	-90.89%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%

* Energy Sector Average

Performance Comparison

SHEL

Shell

72.12

9.45

15.08%

35.21

6.21

21.41%

CVX

Chevron

159.18

23.35

17.19%

XOM

Exxon Mobil

114.56

5.70

5.24%

EQNR

Equinor ASA

25.69

3.19

14.18%

TTE

TotalEnergies

62.47

-0.97

-1.53%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 24, 2025