Shell (SHEL) AI Stock Analysis

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Shell

(NYSE:SHEL)

Rating:77Outperform

Price Target:

$81.00

▲(11.51% Upside)

Shell's overall stock score reflects its solid financial foundation, attractive valuation, and strong earnings call performance. The company's operational efficiency and strategic initiatives in LNG and cost reduction are significant strengths. However, challenges in revenue growth and the macroeconomic environment slightly temper the outlook. The technical analysis suggests a stable trend, supporting the overall positive assessment.

Positive Factors

Balance Sheet Strength

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

Shareholder Distributions

SHEL should be able to maintain 9% shareholder distributions.

Stock Buybacks

The company announced its eighth consecutive $3.5B buyback.

Negative Factors

Chemical Segment Challenges

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

Earnings Volatility

Lower trading results are anticipated due to volatility driven by non-fundamental factors and weaker chemical results.

Free Cash Flow

FCF including interest and lease payments of $4B was unable to cover $5.6B distributions.

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

Market Cap

$207.75B

Dividend Yield3.95%

Average Volume (3M)3.90M

Price to Earnings (P/E)14.2

Beta (1Y)0.28

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees96,000

SectorEnergy

Sector Strength45

IndustryOil & Gas Integrated

Share Statistics

EPS (TTM)1.44

Shares Outstanding2,930,841,800

10 Day Avg. Volume3,989,391

30 Day Avg. Volume3,895,248

Financial Highlights & Ratios

PEG Ratio-1.07

Price to Book (P/B)1.11

Price to Sales (P/S)0.69

P/FCF Ratio5.62

Enterprise Value/Market Cap1.23

Enterprise Value/Revenue0.94

Enterprise Value/Gross Profit6.34

Enterprise Value/Ebitda4.83

Forecast

1Y Price Target

$80.59

Price Target Upside10.94% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering12

Shell Business Overview & Revenue Model

Company DescriptionShell plc (SHEL) is a global energy company headquartered in the Netherlands, operating in various sectors including oil and gas exploration, production, refining, and distribution. The company is also heavily invested in renewable energy solutions such as wind and solar power, as well as electric vehicle charging infrastructure. Its core products and services include crude oil, natural gas, liquefied natural gas (LNG), petrochemicals, and various energy-related offerings, making Shell a key player in the transition to a more sustainable energy future.

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: 2.30%|

Next Earnings Date:Oct 30, 2025

Earnings Call Sentiment Positive

Shell demonstrated strong operational performance with significant achievements in cost reduction and strategic project start-ups despite facing challenges in the Chemicals segment and navigating a difficult macroeconomic environment.

Q2-2025 Updates

Positive Updates

Structural Cost Reduction Achievement

Shell achieved $800 million in structural cost reductions in the first half of 2025, bringing the total since 2022 to $3.9 billion, on track for the target of $5 billion to $7 billion by 2028.

LNG Canada Start-up

The start-up of LNG Canada, where Shell holds a 40% interest, marks a strategic milestone with transit routes to Asia that are over 50% shorter than those from the U.S. Gulf Coast.

Robust Q2 Financial Performance

Shell delivered adjusted earnings of $4.3 billion and cash flow from operations of $11.9 billion in a challenging macro environment.

Shareholder Distributions

Another $3.5 billion share buyback program was announced, making it the 15th consecutive quarter with $3 billion or more in buybacks.

Negative Updates

Challenging Chemical Segment

The Chemicals & Products segment faced challenges with weak margins and unplanned downtime, leading to a disconnect between market volatility and supply-demand fundamentals.

Geopolitical and Economic Uncertainty

Shell navigated a challenging geopolitical and macroeconomic environment, impacting trade flows, commodity prices, and margins.

Company Guidance

During Shell's second quarter 2025 financial results announcement, several key metrics and strategic developments were highlighted. Shell reported $4.3 billion in adjusted earnings and $11.9 billion in cash flow from operations. The company achieved $800 million in structural cost reductions in the first half of 2025, contributing to a total of $3.9 billion since 2022, with a target of $5 to $7 billion by 2028. LNG sales are projected to grow by 4% to 5%, bolstered by the start-up of LNG Canada, where Shell holds a 40% interest. Additionally, Shell announced a $3.5 billion share buyback program, marking the 15th consecutive quarter of buybacks totaling $3 billion or more. Marketing recorded its best Q2 results in nearly a decade, driven by strong performance in Mobility and Lubricants. Shell's gearing stood at 19.1%, and its rolling shareholder distributions were 46% of cash flow from operations (CFFO), within the target range of 40% to 50% through the cycle.

Shell Financial Statement Overview

Summary

Shell demonstrates strong financial performance with a solid gross profit margin and effective cash flow management. Despite revenue fluctuations, profitability remains stable with a healthy capital structure and leverage ratios.

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.

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 Price72.64

Price Trends

50DMA

70.63

Positive

100DMA

67.93

Positive

200DMA

65.93

Positive

Market Momentum

MACD

0.38

Positive

RSI

56.24

Neutral

STOCH

30.43

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 72.64 is above the 20-day moving average (MA) of 71.34, above the 50-day MA of 70.63, and above the 200-day MA of 65.93, indicating a bullish trend. The MACD of 0.38 indicates Positive momentum. The RSI at 56.24 is Neutral, neither overbought nor oversold. The STOCH value of 30.43 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
PBR	81 Outperform	$74.45B	5.69	19.48%	14.74%	-13.68%	-13.96%
TTE	78 Outperform	$136.70B	10.81	10.96%	4.72%	-10.73%	-36.76%
SHEL	77 Outperform	$207.75B	14.22	7.40%	3.95%	―	―
XOM	74 Outperform	$457.79B	15.22	11.68%	3.72%	-3.79%	-15.46%
CVX	73 Outperform	$317.67B	20.03	8.97%	4.27%	-5.02%	-23.13%
Sector *	65 Neutral	$14.84B	8.62	2.77%	5.45%	4.51%	-62.52%
BP	53 Neutral	$86.74B	146.78	0.95%	5.59%	-7.40%	-90.89%

* Energy Sector Average

Performance Comparison

SHEL

Shell

71.85

2.15

3.08%

34.33

2.20

6.85%

CVX

Chevron

156.55

15.68

11.13%

XOM

Exxon Mobil

106.49

-7.56

-6.63%

PBR

Petroleo Brasileiro SA- Petrobras

12.07

-1.11

-8.42%

TTE

TotalEnergies

62.24

-3.39

-5.17%

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: Aug 11, 2025