SHEL LN
Shell Plc
Energy
08/28/2024
Presented
| Date | 08/22/2024 |
| Price | £27.08 |
| Market Cap | $266.97B |
| Ent Value | $326.96B |
| P/E Ratio | 12.13x |
| Book Value | £21.78 |
| Div Yield | 2.96% |
| Shares O/S | 6,416.59M |
| Ave Daily Vol | 10,548,319 |
| Short Int | N/A |
Current
| Price | £25.03 |
| Market Cap | $239.75B |
| Shell Plc engages in the business of producing oil and natural gas. It operates through the following segments: Integrated Gas, Upstream, Marketing, Chemicals and Products, Renewables and Energy Solutions, and Corporate. The Integrated Gas segment includes liquefied natural gas and conversion of natural gas into gas-to-liquids fuels. The Upstream segment focuses on exploration and extraction of crude oil, natural gas, and natural gas liquids. The Marketing segment is involved in mobility, lubricants, and sectors and decarbonization businesses. The Chemicals and Products segment offers chemicals manufacturing plants with marketing network and refineries, which turn crude oil and other feedstocks into a range of oil products. The Renewables and Energy Solutions segment provides renewable power generation, marketing, trading, and optimizing power and pipeline gas, as well as carbon credits and digitally enabled customer solutions. The Corporate segment covers non-operating activities supporting Shell such as holdings, treasury organization, self-insurance activities, and headquarters and central functions. The company was founded in February 1907 and is headquartered in London, the United Kingdom. |
Publicly traded companies mentioned herein: Alimentation Couche-Tard Inc (ATD CN), Casey’s General Stores Inc (CASY), Cheniere Energy Inc (LNG), Chevron Corp (CVX), Exxon Mobil Corp (XOM), Murphy USA Inc (MUSA), Shell PLC (SHEL LN)
Highlights
The presenter is long shares of Shell PLC (SHEL LN) despite his neutral to negative view on energy prices and recommends pairing a short position via the US majors (Chevron, Exxon, etc.), gas retailers, or refiners. SHEL trades at a meaningful discount to the US majors (8.5x vs. ~12x consensus 2025 EPS), and the presenter sees 50% – 100% upside on a SOTP basis. While he acknowledges that SOTP stories in the oil space rarely work, his optimism is supported by the new management team’s apparent commitment to driving the stock price, increasing buybacks, selling of underperforming assets, and closing the valuation gap to peers. He ultimately doesn’t expect to realize the entire SOTP value but sees strong upside to the current £27 share price with several catalysts over the next twelve months.
◆Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.
◆Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.