# Shell (LSE:SHEL)

As of Sun 8 Nov 2026 12:00 UTC (weekly snapshot). Full report: https://standard-equity.report/LSE/SHEL

Price £37.23 (GBP), market cap £212.0B, Energy - Oil & Gas Integrated.

## Valuation

- SE Reference Value (expected value, DCF): £42.59 (central 50% range £33.47 to £52.98), +14% against the price; range width wide
- SE Grade: not rated
- Consensus Rating: Buy (Strong buy 7, Buy 3, Hold 9, Sell 0, Strong sell 0)
- Consensus Price (mean): £41.27, +11% against the price

## Key metrics

Financials in USD. Peer percentile: 100 = best in the peer group.

| Metric | Now | 5Y median | 10Y median | Peers |
|---|---|---|---|---|
| Revenue | $321.3B | CAGR 8.1% | CAGR 1.5% | P87 |
| Revenue growth | 19.4% | -6.1% | -6.1% | P50 |
| Gross margin | 26.9% | 25.4% | 22.9% | P33 |
| Operating margin | 15.3% | 11.2% | 8.8% | P60 |
| Net margin | 10.2% | 6.7% | 5.8% | P53 |
| FCF yield | 13.2% | 16.4% | 12.3% | P70 |
| FCF margin | 11.6% | 10.0% | 9.3% | P67 |
| FCF / net income | 1.14x | 1.34x | 1.25x | P70 |
| ROIC | 14.1% | 8.3% | 7.8% | P47 |
| ROE | 17.5% | 10.3% | 9.5% | P47 |
| ROA | 7.8% | 4.8% | 4.5% | P47 |
| EPS | $5.79 | CAGR 3.9% | CAGR 20.0% | - |
| EPS growth | 133.6% | 18.6% | 18.6% | P72 |
| Book value per share | $35.11 | CAGR 8.0% | CAGR 2.4% | - |
| FCF per share | $6.61 | CAGR 12.3% | CAGR 10.7% | - |
| Dividend per share | $1.54 | CAGR 17.2% | CAGR -2.9% | - |
| Dividend yield | 3.1% | 4.1% | 4.4% | P31 |
| Payout ratio | 26.8% | 45.4% | 54.9% | P31 |
| Diluted shares | 5,693.9M | CAGR -5.3% | CAGR -3.1% | P90 |
| Buyback yield | 4.3% | 6.4% | 3.9% | P90 |
| Debt/equity | 0.38x | 0.43x | 0.43x | P60 |
| Enterprise value | $332.1B | CAGR 3.6% | CAGR -0.5% | P87 |
| Long-term debt | $67.13B | CAGR -6.1% | CAGR -2.4% | P90 |

## Company Note (Q3 2026)

Written by AI from the data above.

**Shell's third quarter was carried** by trading and refining. Revenue rose 36.2% year on year and diluted EPS rose 136.7%. Management credited strong operations and a trading contribution backed by effective risk management. Refining had a record quarter, with utilisation above 100% outside Rhineland, where low Rhine water levels held output back. Lower marketing margins pulled the other way. The shares look priced below what the cash flows support: SE fair value of £43 is 14.4% above the price.

**Management lowered 2026 cash capex guidance** to $23 billion-$25 billion, which includes about $4 billion for ARC Resources. It expects a further $5 billion buyback to finish by the fourth-quarter results. Gearing is 17%, and Q4 integrated refining margins could come in lower because of freight rates. Analysts asked whether freight lease valuations reflect the forward curve; management said the rise is an IFRS treatment using spot rates. On Chemicals the CEO said: "We will transact for value." Revenue growth is slowing, while consensus still looks for a strong full year.

**Analysts expect EPS growth** of 107.8% in FY2026, followed by a 9.4% decline in FY2027. That makes this year's jump look like a high point rather than a new base. Consensus revenue growth for FY2026 is 31.2%, yet the price implies revenue falling 1.3% a year. That gap is where the upside sits: the market is discounting a sharp reversal. Shell beat estimates in 6 of the last 8 quarters, so near-term figures have tended to land at or above expectations.

**Returns have weakened** over three years. ROE fell from 23.3% in FY2022 to 10.1% in FY2025, and ROIC dropped from 18.4% to 8.3%. Operating margin slid from 16.9% to 11.2% over the same span. Gross margin has held steady at 26.9% against its own history, so the erosion sits below the gross line. What holds Quality back is that falling return profile, which leaves Shell earning only modestly above its cost of capital.

**The stock trades** at a P/E of 8.7x, against a 10-year own median of 11.7x. SE fair value of £43 is 14.4% above the price, though confidence is low and the estimate is uncertain. The star- and recency-weighted analyst target of £41 sits 10.9% above the price. For the price to hold, revenue needs to do little more than stay flat over a decade. A FY2027 decline steeper than consensus would be the first sign that even that modest bar is at risk.

**The SE Score is not rated**, because Moat scores zero. Quality earns three stars on the strength of the balance sheet: ROIC of 8% clears a 6.0% cost of capital, free cash flow has run well above net income, and interest is covered nearly ten times. Moat earns no stars because ROIC topped 15% in only one of the last ten years. Value earns two stars, with the earnings multiple sitting well below its own ten-year median and SE fair value above the price.

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Weekly snapshot, not live data. For information only, not investment advice. Methodology: https://standard-equity.report/methodology