Energy giant Shell (NYSE:SHEL) has revised its carbon reduction ambitions by scaling back its 2030 targets and eliminating those set for 2035. This decision is influenced by the expectation of reduced power revenue and increased gas demand. Despite these changes, the company remains committed to achieving its net-zero targets by 2050.
Shifting To Profit Focus
The company is focusing on higher-margin projects and a ramp-up in natural gas output to drive returns. For 2030, Shell is aiming for a 15% to 20% decrease in the net carbon intensity of its energy products, according to Reuters. It previously aimed for a reduction of 20%. At the same time, it completely scrapped a goal of a 45% cut in its carbon intensity by 2035.
With a commitment to reducing overall emissions from oil products by 15% to 20% by 2030, Shell has shifted its focus in recent times. The company has undergone a significant project reshuffle, including the sale of its power trading operations in Europe, withdrawal from offshore wind and low-carbon projects, reduced involvement in Nigeria, and plans to divest its solar assets in the U.S. Furthermore, as part of its cost reduction strategy, Shell is cutting around 20% of positions in its deal teams.
Is Shell a Good Stock to Buy?
Shell’s share price has steadily climbed by nearly 11% over the past year. Overall, the Street has a Strong Buy consensus rating on the stock, and the average SHEL price target of $71.80 points to a modest 9.3% potential upside.
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