Shell's Solid Q3 Performance: Strong Revenue, $3.5 Billion Buyback, And Refined Capex Guidance
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 31 2024
0mins
Should l Buy SHEL?
Source: Benzinga
Financial Performance: Shell plc reported third-quarter revenue of $71.09 billion, exceeding expectations, while net income rose to $4.29 billion. However, adjusted earnings decreased by 4% quarter-over-quarter due to lower refining margins and increased operating expenses.
Future Outlook: The company announced a $3.5 billion share buyback program and revised its cash capital expenditure guidance to below $22 billion. For the fourth quarter, Shell expects production levels and refinery utilization rates to remain steady, with corporate adjusted earnings projected as a net expense.
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Analyst Views on SHEL
Wall Street analysts forecast SHEL stock price to fall
10 Analyst Rating
5 Buy
5 Hold
0 Sell
Moderate Buy
Current: 80.230
Low
41.75
Averages
74.27
High
91.00
Current: 80.230
Low
41.75
Averages
74.27
High
91.00
About SHEL
Shell plc is an international energy company engaged in the principal aspects of the energy and petrochemical industries. The Company's segments include Integrated Gas, Upstream, Marketing, Chemicals and Products, Renewables and Energy Solutions, and Corporate. The Integrated Gas segment includes liquefied natural gas (LNG), conversion of natural gas into gas-to-liquids (GTL) fuels and other products. It includes natural gas and liquids exploration and extraction, and the operation of the upstream and midstream infrastructure. The Upstream segment includes exploration and extraction of crude oil, natural gas and natural gas liquids. It also markets and transports oil and gas and operates the infrastructure necessary to deliver them to the market. The Marketing segment comprises the Mobility, Lubricants, and Sectors & Decarbonization businesses. The Chemicals and Products segment includes chemicals manufacturing plants with their own marketing network, and refineries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Declining Reserve Life: As of 2025, Shell's reserve life has dropped to less than eight years, down from nine years in 2024, indicating a concerning decline in production from maturing fields, which is significantly lower than the 12-plus years seen at Exxon and TotalEnergies, potentially impacting future output.
- Capital Utilization Strategy: Sawan emphasized that Shell does not need to leverage its own capital for U.S. LNG projects due to the availability of abundant low-cost funding for infrastructure, which helps mitigate financial risks and optimize capital allocation.
- LNG Market Management: As one of the largest offtakers of U.S. LNG, Shell effectively manages price exposure through customer contracts indexed to Henry Hub natural gas prices, allowing the company to capture attractive value in the LNG chain without tying up significant capital.
See More
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- Operational Capacity Overview: Sprng Energy boasts an operational capacity of 2,300 MWp and a contracted total capacity of 5,026 MWp, indicating its potential in the Indian renewable energy market while providing a significant asset base for Shell's long-term strategy.
- CEO's Shift in Perspective: Shell's CEO Wael Sawan stated at the International Energy Week 2026 that the company cannot be divorced from global energy demands, suggesting a possible adjustment to its net-zero emissions target in light of anticipated growth in energy consumption.
- Future Production Goals: Shell aims to increase oil and gas production by at least 1 million barrels of oil equivalent per day by 2030, indicating a continued investment in traditional energy sectors, which may influence its renewable energy strategy.
See More
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- Current Auditor Continuation: Ernst & Young (EY) will continue as Shell's external auditor for the financial year ending December 31, 2026, also subject to shareholder approval at the 2026 AGM, ensuring continuity in audit services.
- Audit Report Quality: Over the past two years, EY issued only unqualified reports on Shell's consolidated financial statements and internal control effectiveness, with no disagreements on accounting matters or disclosures, indicating stable audit quality.
- Tender Process Transparency: Audit tender participants were informed of the outcome on February 5, 2026, and further details regarding the tender process will be included in Shell's 2025 Annual Report and Form 20-F, enhancing corporate governance transparency.
See More
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- LNG Project Progress: ConocoPhillips highlighted advancements in liquefied natural gas (LNG) initiatives, including developments in Qatar and the Port Arthur LNG project, indicating a strategic pivot towards global gas markets that is expected to positively influence future earnings.
- ETF Investment Trends: Many flagship energy funds are heavily weighted towards large integrated producers, while globally focused products like the iShares Global Energy ETF (NYSE:IXC) include international LNG leaders such as Shell, providing investors with indirect exposure to the expanding global gas trade.
- Stable Shareholder Returns: Despite earnings pressures, shareholder payouts remain robust across the energy sector, with dividends and share repurchases by large producers continuing to enhance the yield profile of energy ETFs, indicating a transition in the sector rather than deterioration.
See More
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- Earnings Decline: Shell (SHEL) reported a Q4 adjusted net income of $3.26 billion, an 11% year-over-year drop that fell short of the $3.5 billion analyst consensus, indicating that a 2% production increase was insufficient to enhance profitability, potentially raising scrutiny on CEO Wael Sawan.
- Shareholder Returns: Despite disappointing earnings, Shell maintained its $3.5 billion quarterly buyback program and raised its dividend by 4% to $0.372 per share, resulting in shareholder payouts totaling 52% of operating cash flow over the last four quarters, exceeding the company's target range of 40%-50%.
- Rising Operating Costs: Analysts expressed concerns over Shell's increasing operating expenses, suggesting that the sustainability of the buyback program could be jeopardized without improved financial performance, which may impact investor confidence moving forward.
- Declining Reserve Life: Shell's reserve life decreased from 8.9 years in 2024 to 7.8 years, primarily due to asset sales in Nigeria and oil sands, leading analysts to anticipate increased scrutiny regarding Shell's M&A reserve replacement strategy.
See More
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- Earnings Focus: Amazon.com Inc. (NASDAQ:AMZN) is set to report earnings after the bell, with analysts expecting $1.97 per share on revenue of $211.32 billion, which could significantly influence market sentiment depending on the results.
- Jobless Claims Insight: The latest weekly jobless claims report will be released on Thursday morning, and market participants will closely monitor this data to assess the durability of the U.S. labor market, potentially impacting the Federal Reserve's monetary policy decisions.
- Bond Yield Trends: The 10-year Treasury bond yielded 4.27%, while the two-year bond stood at 3.55%, indicating market expectations regarding interest rate policies, with the CME Group's FedWatch tool showing a 90.1% likelihood of the Federal Reserve keeping rates unchanged in March.
See More
