Shell (SHEL) AI Stock Analysis

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Shell

(NYSE:SHEL)

Rating:76Outperform

Price Target:

$75.00

▲( 13.12% Upside)

Shell's overall stock score reflects solid financial performance supported by strong cash flow and profitability. The company's strategic initiatives and robust shareholder returns contribute positively. While technical indicators suggest stability, valuation metrics align well with industry standards. The earnings call underscores growth and resilience, despite macroeconomic challenges, making Shell a solid candidate for investment in the oil and gas sector.

Positive Factors

Financial Performance

SHEL is viewed as the strongest Euro IOC due to its strong balance sheet and underlying growth.

Market Position

SHEL remains focused on portfolio simplification and 'value over volume.'

Shareholder Distribution

SHEL announced a 4% dividend increase and incremental $3.5bn buyback program for Q1'25.

Negative Factors

Chemicals Segment

Monaca has failed to lift SHEL's chemicals segment into positive earnings given its chemicals portfolio is weighted to higher-cost liquids feed.

Earnings

CFO guidance in Integrated Gas and Upstream was worse than forecast, with questions on the need for Upstream M&A.

Price Target

A reduction in near-term earnings from commodity changes leads to a lower price target.

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

Market Cap

$194.14B

Dividend Yield4.19%

Average Volume (3M)3.96M

Price to Earnings (P/E)15.2

Beta (1Y)0.32

Revenue Growth-2.62%

EPS Growth-20.13%

CountryUS

Employees96,000

SectorEnergy

Sector Strength46

IndustryOil & Gas Integrated

Share Statistics

EPS (TTM)1.84

Shares Outstanding2,975,777,600

10 Day Avg. Volume3,253,743

30 Day Avg. Volume3,963,079

Financial Highlights & Ratios

PEG Ratio-1.03

Price to Book (P/B)1.17

Price to Sales (P/S)0.00

P/FCF Ratio6.35

Enterprise Value/Market Cap1.23

Enterprise Value/Revenue0.21

Enterprise Value/Gross Profit5.63

Enterprise Value/Ebitda0.99

Forecast

1Y Price Target

$75.87

Price Target Upside14.43% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering9

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 makes money through several revenue streams, primarily driven by the exploration and production of oil and natural gas, which involves extracting crude oil and natural gas from reserves worldwide. The company's downstream operations, which include refining crude oil into usable products like gasoline, diesel, and jet fuel, also contribute significantly to its revenue. Additionally, Shell generates income through the sale of petrochemical products. The company is increasingly investing in renewable energy projects, such as wind and solar farms, and expanding its electric vehicle charging network, which are expected to become more significant sources of revenue as global energy consumption patterns shift. Strategic partnerships and joint ventures with other energy companies and technology firms further enhance Shell's ability to innovate and expand its market reach, contributing to its overall earnings.

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 has shown fluctuations, with recent stability around 16-17 million metric tons. The acquisition of Pavilion Energy and strategic divestments aim to bolster LNG capabilities, yet unplanned outages in Australia have impacted performance. Despite these challenges, Shell's robust earnings growth and strategic repositioning, including significant investments in carbon capture and the Gato do Mato project, suggest a focus on long-term resilience and growth. The $3.5 billion share buyback underscores confidence, though macroeconomic uncertainties remain a concern for future LNG sales momentum.

Data provided by:

Main Street Data

Shell Financial Statement Overview

Summary

Shell presents a solid financial performance across its financial statements. Despite facing revenue and net income fluctuations, the company maintains profitability and a stable capital structure with healthy leverage ratios. Strong cash flow generation supports its operational capabilities, positioning Shell well in the oil and gas industry.

Income Statement

Positive

Shell's income statement reflects a strong gross profit margin of 15.1% in the TTM (Trailing-Twelve-Months) with an EBIT margin of 9.7% and EBITDA margin of 19.5%. However, there is a notable decline in revenue growth from 2024 to TTM. The net profit margin stands at 4.8%, showing profitability but room for improvement. Overall, Shell maintains solid profitability despite fluctuations in revenue and net income.

Balance Sheet

Positive

The balance sheet shows a healthy debt-to-equity ratio of 0.43, indicating balanced leverage. The equity ratio is stable at 45.9%, reflecting a strong capital structure. Return on Equity (ROE) is relatively moderate at 7.6%, suggesting efficient use of equity capital. Shell demonstrates a stable financial position with manageable debt levels and a solid equity base.

Cash Flow

Very Positive

Shell's cash flow is robust, with a solid operating cash flow to net income ratio of 3.75, indicating strong cash generation. The free cash flow to net income ratio is 2.31, underscoring effective cash flow management. However, there is a decline in free cash flow growth in the TTM period. Overall, Shell's cash flow position is strong, supporting ongoing operations and investments.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
281.07B	284.31B	316.62B	381.31B	261.50B	180.54B
	Gross Profit
42.59B	72.81B	47.21B	78.78B	35.85B	-12.99B
	EBIT
27.34B	29.99B	30.74B	67.35B	27.44B	-22.88B
	EBITDA
54.83B	58.49B	68.55B	86.60B	54.36B	29.53B
	Net Income Common Stockholders
13.52B	16.09B	19.36B	42.31B	20.10B	-21.53B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
39.11B	39.11B	38.77B	40.25B	36.97B	31.83B
	Total Assets
387.61B	387.61B	406.27B	443.02B	404.38B	379.27B
	Total Debt
77.14B	77.14B	81.64B	83.80B	89.09B	108.01B
	Net Debt
38.03B	38.03B	42.87B	43.55B	52.12B	76.18B
	Total Liabilities
207.44B	207.44B	217.91B	250.43B	229.05B	220.73B
	Stockholders Equity
178.31B	178.31B	186.61B	190.47B	171.97B	155.31B
Cash Flow		Free Cash Flow
31.27B	35.08B	31.20B	45.81B	26.11B	17.52B
	Operating Cash Flow
50.63B	54.68B	54.19B	68.41B	45.10B	34.10B
	Investing Cash Flow
-15.59B	-15.15B	-17.73B	-22.45B	-4.76B	-13.28B
	Financing Cash Flow
-39.37B	-38.43B	-38.23B	-41.95B	-34.66B	-7.22B

Shell Technical Analysis

Technical Analysis Sentiment

Positive

Last Price66.30

Price Trends

50DMA

66.33

Negative

100DMA

65.67

Positive

200DMA

65.46

Positive

Market Momentum

MACD

0.34

Negative

RSI

53.84

Neutral

STOCH

31.83

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 66.3 is above the 20-day moving average (MA) of 65.56, below the 50-day MA of 66.33, and above the 200-day MA of 65.46, indicating a neutral trend. The MACD of 0.34 indicates Negative momentum. The RSI at 53.84 is Neutral, neither overbought nor oversold. The STOCH value of 31.83 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 (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TTE	77 Outperform	$121.58B	9.50	11.75%	4.79%	-9.86%	-32.59%
SHEL	76 Outperform	$194.14B	15.19	7.40%	4.19%	-2.62%	-20.13%
CVX	75 Outperform	$238.45B	15.65	10.11%	4.83%	-1.05%	-19.71%
XOM	74 Outperform	$444.02B	13.63	14.18%	3.77%	2.36%	-7.18%
BP	69 Neutral	$75.24B	186.20	-1.87%	6.38%	-7.70%	-113.83%
PBR	68 Neutral	$73.66B	9.01	11.25%	15.51%	-10.84%	-61.73%
Sector *	57 Neutral	$7.06B	3.07	-3.48%	5.79%	0.59%	-50.58%

* Energy Sector Average

Performance Comparison

SHEL

Shell

66.30

-2.54

-3.69%

29.09

-6.14

-17.43%

CVX

Chevron

136.54

-15.59

-10.25%

XOM

Exxon Mobil

103.03

-7.96

-7.17%

PBR

Petroleo Brasileiro SA- Petrobras

11.84

-1.40

-10.57%

TTE

TotalEnergies

57.89

-11.11

-16.10%

Shell Earnings Call Summary

Earnings Call Date:May 02, 2025

(Q1-2025)

% Change Since: 3.42%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Positive

The earnings call reflects a positive sentiment overall, with strong earnings growth, strategic repositioning, and continued shareholder returns. However, challenges in certain segments and macroeconomic uncertainties were acknowledged.

Q1-2025 Updates

Positive Updates

Record Adjusted Earnings Increase

Adjusted earnings were $5.6 billion, up 52% compared with Q4.

Strong Cash Flow Generation

Generated $11.9 billion of cash flow from operations, excluding working capital.

Strategic Portfolio Repositioning

Completed divestments of the Energy and Chemicals Park in Singapore and onshore Nigeria. Acquired Pavilion Energy, enhancing LNG trading capabilities.

Significant Project Developments

Final investment decisions for Gato do Mato in Brazil and Phase 2 of Northern Lights carbon capture in Norway.

Shareholder Returns

Announced a $3.5 billion share buyback program, marking the 14th consecutive quarter with buybacks of at least $3 billion.

Negative Updates

Unplanned Outages in Australia

Liquefaction volumes were lower due to unplanned outages, affecting overall Integrated Gas performance.

Macroeconomic Uncertainty

Significant macro uncertainties noted, with potential impacts on financial performance moving forward.

Challenges in Low-Carbon Business

Continued operational difficulties in the low-carbon option businesses, impacted by a challenging macro environment.

Chemical Sector Weakness

Chemical margins remained low, despite divestment expectations in Singapore.

Company Guidance

In the first quarter of 2025, Shell reported adjusted earnings of $5.6 billion, a 52% increase from the previous quarter, and generated $11.9 billion in cash flow from operations, excluding a $2.7 billion working capital outflow. The company completed key portfolio actions, such as divesting from assets in Singapore and onshore Nigeria and acquiring Pavilion Energy to strengthen its LNG capabilities. Shell made significant investment decisions, including the Gato do Mato project in Brazil and the expansion of the Northern Lights carbon capture project in Norway. Operational milestones included the launch of the Penguins FPSO in the UK and the start of production at Dover in the Gulf of America. Despite macroeconomic uncertainties, Shell announced a $3.5 billion share buyback program, continuing its strategy of consistent shareholder distributions within a 40% to 50% range of cash flow from operations. The company remains focused on cost discipline, with future opportunities for cost savings and operational efficiencies expected to drive continued growth and resilience.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.