Shell (NYSE:SHEL) Given New $116.00 Price Target at Wells Fargo & Company

Key Points

• Wells Fargo raised Shell’s price target to $116 from $105 while maintaining an “equal weight” rating, implying approximately 6.5% upside from the reported share price.
• Shell shares traded near a one-year high, and the company beat quarterly earnings expectations with EPS of $3.86 versus the $3.54 consensus, despite revenue coming in slightly below estimates.
• The board authorized a $5 billion share-repurchase program covering up to 1.7% of outstanding shares; analysts overall rate Shell “Moderate Buy,” with a consensus price target of $107.86.

Shell (NYSE:SHEL - Get Free Report) had its price target hoisted by analysts at Wells Fargo & Company from $105.00 to $116.00 in a report released on Friday, Benzinga reports. The brokerage currently has an "equal weight" rating on the energy company's stock. Wells Fargo & Company's target price would suggest a potential upside of 6.53% from the company's current price.

A number of other research firms also recently issued reports on SHEL. Morgan Stanley upgraded Shell from an "equal weight" rating to an "overweight" rating and set a $101.30 price target on the stock in a research note on Thursday, September 3rd. Zacks Research raised Shell from a "hold" rating to a "strong-buy" rating in a research report on Tuesday, October 6th. Mizuho set a $103.00 price target on shares of Shell in a research report on Monday, October 12th. HSBC reiterated a "buy" rating on shares of Shell in a research note on Friday, September 25th. Finally, Barclays restated an "overweight" rating on shares of Shell in a research report on Monday, October 5th. Two analysts have rated the stock with a Strong Buy rating, seven have given a Buy rating and nine have assigned a Hold rating to the company. Based on data from MarketBeat, the company currently has an average rating of "Moderate Buy" and a consensus price target of $107.86.

Shell Stock Performance

Shares of SHEL traded up $1.22 during mid-day trading on Friday, hitting $108.89. 2,886,184 shares of the company traded hands, compared to its average volume of 6,870,528. The stock has a market cap of $311.94 billion, a price-to-earnings ratio of 12.01, a P/E/G ratio of 0.86 and a beta of 0.10. The stock has a 50-day moving average price of $97.80 and a two-hundred day moving average price of $87.99. Shell has a 1 year low of $68.63 and a 1 year high of $109.37. The company has a debt-to-equity ratio of 0.36, a quick ratio of 1.12 and a current ratio of 1.43.

Shell (NYSE:SHEL - Get Free Report) last posted its earnings results on Friday, October 30th. The energy company reported $3.86 EPS for the quarter, topping analysts' consensus estimates of $3.54 by $0.32. The business had revenue of $92.85 billion during the quarter, compared to the consensus estimate of $93.25 billion. Shell had a net margin of 8.55% and a return on equity of 14.34%. Equities analysts anticipate that Shell will post 11.94 earnings per share for the current year.

Shell declared that its board has authorized a share repurchase program on Thursday, October 29th that allows the company to repurchase $5 billion in outstanding shares. This repurchase authorization allows the energy company to reacquire up to 1.7% of its shares through open market purchases. Share repurchase programs are typically an indication that the company's board believes its stock is undervalued.

Institutional Investors Weigh In On Shell

Several large investors have recently made changes to their positions in the company. Bank of America Corp DE raised its holdings in shares of Shell by 1.9% in the 2nd quarter. Bank of America Corp DE now owns 7,709,715 shares of the energy company's stock valued at $597,811,000 after purchasing an additional 146,988 shares in the last quarter. Envestnet Asset Management Inc. raised its holdings in Shell by 7.9% during the second quarter. Envestnet Asset Management Inc. now owns 2,352,694 shares of the energy company's stock worth $182,425,000 after purchasing an additional 171,873 shares in the last quarter. First Eagle Investment Management LLC lifted its position in shares of Shell by 1.5% during the 2nd quarter. First Eagle Investment Management LLC now owns 1,073,265 shares of the energy company's stock worth $83,221,000 after buying an additional 16,244 shares during the last quarter. Engineers Gate Manager LP boosted its holdings in shares of Shell by 300.7% in the 2nd quarter. Engineers Gate Manager LP now owns 840,770 shares of the energy company's stock valued at $65,193,000 after buying an additional 630,948 shares in the last quarter. Finally, Jones Financial Companies Lllp raised its stake in Shell by 5.2% during the 2nd quarter. Jones Financial Companies Lllp now owns 776,654 shares of the energy company's stock worth $59,445,000 after acquiring an additional 38,212 shares in the last quarter. 28.60% of the stock is owned by institutional investors.

Key Stories Impacting Shell

Here are the key news stories impacting Shell this week:

• Positive Sentiment: Profit and cash generation surged. Shell reported third-quarter adjusted earnings of approximately $10.8 billion, nearly double the year-ago result and above expectations. Revenue was $92.85 billion, slightly below estimates, but the earnings beat is the more important market signal. Shell beats expectations with $10.8 billion profit, hikes buybacks
• Positive Sentiment: Record refining margins drove the upside. Shell benefited from unusually strong spreads between crude oil and refined fuels, particularly diesel, amid severe disruption and supply constraints in global energy markets. Management’s focus on operational performance helped lift adjusted EBITDA to about $22.7 billion. Shell nearly doubles quarterly profit year-on-year as refining margins soar to record high
• Positive Sentiment: Shell increased capital returns. The board authorized a $5 billion share buyback, representing up to roughly 1.7% of shares outstanding. The company also declared a third-quarter interim dividend of $0.3906 per ordinary share, reinforcing the investment case for income and shareholder returns. Shell initiates $5 billion share buyback
• Neutral Sentiment: Geopolitical conditions are boosting near-term results. Higher oil prices and Middle East-related supply disruption supported Shell’s quarterly performance, but these factors are difficult to forecast and may not persist. Shell lifts buyback as high oil price drives bumper profits
• Negative Sentiment: Refining earnings may normalize. Analysts and company commentary indicate that record refining margins could fade, while Shell’s upstream operations faced lower realized oil and liquids prices than in the prior quarter. That creates a risk that quarterly earnings and buyback capacity decline from current peaks. Shell Profit Leans on Record Refining Margins

Shell Company Profile

Shell plc is a global energy company headquartered in London, England. Its operations span the energy value chain, including the exploration, production, processing, trading and marketing of oil and natural gas. The company is also a major participant in liquefied natural gas (LNG), refining, chemicals and energy-related products.

Shell sells fuels, lubricants and other petroleum products through branded retail and commercial businesses, while also providing services to industrial, marine and aviation customers.

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