Shell (SHEL) AI Stock Analysis

• Market Cap: $209.44B
• Dividend Yield: 4.01%
• Average Volume (3M): 3.46M
• Price to Earnings (P/E): 16.6
• Beta (1Y): 0.32
• Revenue Growth: -2.62%
• EPS Growth: -20.13%
• Country: US
• Employees: 96,000
• Sector: Energy
• Sector Strength: 55
• Industry: Oil & Gas Integrated
• EPS (TTM): 1.84
• Shares Outstanding: 2,966,701,200
• 10 Day Avg. Volume: 3,533,717
• 30 Day Avg. Volume: 3,462,670
• PEG Ratio: 0.08
• Price to Book (P/B): 2.20
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 9.13
• Enterprise Value/Market Cap: 2.64
• Enterprise Value/Revenue: 0.48
• Enterprise Value/Gross Profit: 13.00
• Enterprise Value/Ebitda: 2.28
• 1Y Price Target: $75.87
• Price Target Upside: 4.59% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

• Rating: 76 Outperform
• Price Target: $75.00 ▲(3.39%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 Strategy

SHEL's strong balance sheet supports potential M&A opportunities, as indicated by interest in Upstream M&A at its recent Investor Day.

Market Positioning

SHEL is best positioned among Euro peers to stabilize attractive shareholder distributions even in a lower price environment.

Shareholder Returns

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

Negative Factors

Commodity Price Impact

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

Earnings Impact

Earnings loss from SPDC divestment should offset operating expense savings from Singapore divestment.

Production Challenges

2Q Upstream production was guided lower than expected.

Shell Business Overview & Revenue Model

Company Description

Shell 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 Money

Shell generates revenue through several key streams. The largest portion of its income comes from upstream operations, where the company explores for and extracts crude oil and natural gas. Once extracted, these resources are refined into various products such as gasoline, diesel, and jet fuel, which are sold to consumers and businesses globally. Downstream operations, including refining and retailing, add significant revenue through the sale of these products. Additionally, Shell earns from its integrated gas and new energies segments, which involve the production and sale of liquefied natural gas (LNG) and investments in renewable energy sources. Strategic partnerships and joint ventures with other energy companies and technological investments also contribute to Shell's earnings, optimizing production efficiency and expanding its market reach.

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

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

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

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
281.07B	284.31B	316.62B	381.31B	261.50B	180.54B
	Gross Profit
42.59B	36.30B	36.58B	78.78B	35.85B	-12.99B
	EBIT
27.34B	29.99B	30.74B	63.11B	22.28B	-25.53B
	EBITDA
54.83B	58.49B	68.55B	86.60B	56.51B	2.22B
	Net Income Common Stockholders
13.52B	16.09B	19.36B	42.31B	20.10B	-21.68B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
35.60B	39.11B	38.77B	40.25B	36.97B	31.83B
	Total Assets
389.25B	387.61B	406.27B	443.02B	404.38B	379.27B
	Total Debt
76.51B	77.14B	81.64B	83.80B	89.09B	108.01B
	Net Debt
40.91B	38.03B	42.87B	43.55B	52.12B	76.18B
	Total Liabilities
208.58B	207.44B	217.91B	250.43B	229.05B	220.73B
	Stockholders Equity
178.81B	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 Price: 72.54
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 72.54 is above the 20-day moving average (MA) of 67.77, above the 50-day MA of 65.57, and above the 200-day MA of 65.37, indicating a bullish trend. The MACD of 1.43 indicates Negative momentum. The RSI at 77.73 is Negative, neither overbought nor oversold. The STOCH value of 98.92 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SHEL.

Shell Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CVX	78 Outperform	$253.17B	16.73	10.11%	4.72%	-1.05%	-19.71%
TTE	78 Outperform	$129.74B	10.19	11.75%	5.27%	-9.86%	-32.59%
XOM	77 Outperform	$472.90B	14.83	14.18%	3.61%	2.36%	-7.18%
SHEL	76 Outperform	$209.44B	16.62	7.40%	4.01%	-2.62%	-20.13%
PBR	75 Outperform	$74.59B	9.18	11.25%	8.35%	-10.84%	-61.73%
BP	68 Neutral	$79.01B	186.20	-1.87%	6.14%	-7.70%	-113.83%
Sector *	58 Neutral	$7.47B	3.50	-4.45%	10.05%	0.81%	-49.42%