Update shared on10 Sep 2025
Fair value Decreased 0.73%Shell’s consensus price target was slightly reduced to £30.10 as bullish sentiment on strong Q2 results and sector tailwinds was tempered by concerns over near-term momentum, resulting in minor downward revisions rather than a fundamental change in outlook.
Analyst Commentary
- Bullish analysts highlight Shell’s robust second quarter results, emphasizing the company’s distinctive growth prospects, deep resource base, and commitment to sustainable shareholder returns.
- A favorable medium-term refining outlook is noted as a supporting factor for Shell’s performance and future potential.
- Certain analysts have raised price targets in line with sector-wide updates for large-cap integrated oil, refining, and E&P stocks.
- Bearish analysts express concern regarding Shell’s expected weak momentum in upcoming quarters, prompting a downgrade to Neutral from Outperform.
- Minor price target reductions by some analysts reflect cautious adjustments rather than a fundamental change of outlook.
What's in the News
- OPEC+ agreed to increase oil output by 137,000 barrels per day in October 2025, raising concerns over potential supply glut and pressuring oil prices; Shell is among the major public companies affected (WSJ).
- Shell lost a $1.7B arbitration case to Venture Global over withheld LNG cargoes, with broader industry implications as other companies face related disputes totaling up to $7.4B (WSJ).
- Reports emerged that Shell is in early, active talks to acquire rival BP, potentially creating the largest oil deal since the Exxon Mobil merger, with BP shares surging on the news (WSJ).
- Contradictory statements followed, with Shell publicly denying any takeover talks with BP, calling such reports "market speculation" (Bloomberg).
- Additional sources suggest Shell is "unlikely" to purchase all of BP, pointing instead to a scenario where various parts of BP could be acquired by multiple firms if any deal materializes (CNBC).
Valuation Changes
Summary of Valuation Changes for Shell
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from £30.32 to £30.10.
- The Future P/E for Shell has significantly fallen from 12.74x to 9.54x.
- The Discount Rate for Shell remained effectively unchanged, moving only marginally from 7.43% to 7.52%.
Disclaimer
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