Shell's Upstream Success Balances Downstream Challenges In Q4, Analyst Reaffirms Potential Upside

Piper Sandler analyst Ryan M. Todd reiterated the Overweight rating on Shell PLC SHEL, with a price target of $75.

In the fourth quarter, the company reported revenue of $78.73 billion, missed the consensus of $84.71 billion. Adjusted earnings per ADS for the quarter was $2.22, above the consensus of $0.97.

Strong production, realizations and LNG trading lead to an Upstream beat in the quarter under review, offset by downstream and renewables weakness, the analyst said.

Chemicals reported a loss of $492 million in the fourth quarter, versus PSC’s loss of $316 million, driven by continued weak demand and weak trading results.

Products reported adjusted earnings of $576 million in the fourth quarter, driven by lower refining margins, per the analyst.

The earnings in the quarter were driven by strong trading, production, and realizations.

The completion of North American maintenance and Chem plant utilization drove marketing sales volumes and Refinery utilization in the quarter under review.

The analyst also highlights that debt was reduced by $0.6 billion in the fourth quarter, and the company announced a 4% annual dividend increase and a $3.5 billion buyback program for the first quarter.

Price Action: SHEL shares are trading lower by 1.26% to $63.28 on the last check Friday.

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