Oil giant Shell (SHEL) is set to release its Q1 earnings report before markets open on Friday. This has some investors wondering whether it’s a good idea to buy shares of SHEL stock beforehand.
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What Wall Street Expects
The prices of oil and natural gas have fallen sharply in the past month given concerns about the impact of tariffs on global growth and subsequent demand for energy. Shell has also recently flagged the impact of bad weather and maintenance in Australia upon natural gas output.
However, Wall Street analysts expect a 6% increase in full-year pre-tax income to $31.6 billion but adjusted earnings to drop from $7.7 billion in the same period last year to $5.0 billion.
The bulk of the drop is expected to come from its Integrated Gas and Chemicals operations, with Renewables and Energy Solutions also showing a decline.
Will SHEL be able to beat these estimates? As one can see below it has a good recent record of doing so.
Analyst Comments on SHEL Stock Prior to Earnings
Analysts at AJ Bell said SHEL shareholders will be focused on cash returns. In the fourth quarter of last year Shell nudged up its dividend to $0.3580, a run rate of $3.6 billion per quarter. Chief executive Wael Sawan launched a $3.5 billion share buyback for the first quarter, compared to the $2.8 billion programme run in the equivalent three-month period one year ago.
Overall, in 2024, Shell returned $22.6 billion to its shareholders via buybacks and dividends, equivalent to 11.5% of its current stock market capitalisation.
AJ Bell believes that “given trends in the oil and gas price, it seems logical to assume earnings will come in lower in the first quarter of 2025 than they did in the first three months of 2024.”
Analysts at Scotiabank lowered the firm’s price target on SHEL to $70 from $75 and kept an Outperform rating on the shares. Wells Fargo analyst Roger Read lowered the price target to $83 from $87 and also kept an Overweight rating on the shares.
Is SHEL a Good Stock to Buy Now?
On TipRanks, SHEL has a Strong Buy consensus based on 7 Buy and 1 Hold rating. Its highest price target is $85. SHEL stock’s consensus price target is $78.67 implying an 22.01% upside.
