Shell plc Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Last week saw the newest third-quarter earnings release from Shell plc (LON:SHEL), an important milestone in the company's journey to build a stronger business. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at US$68b, statutory earnings beat expectations by a notable 10%, coming in at US$0.90 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Taking into account the latest results, Shell's 23 analysts currently expect revenues in 2026 to be US$272.0b, approximately in line with the last 12 months. Statutory earnings per share are predicted to soar 33% to US$3.37. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$272.5b and earnings per share (EPS) of US$3.49 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

View our latest analysis for Shell

The consensus price target held steady at UK£31.49, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Shell analyst has a price target of UK£40.03 per share, while the most pessimistic values it at UK£29.16. This is a very narrow spread of estimates, implying either that Shell is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Shell's revenue growth is expected to slow, with the forecast 0.9% annualised growth rate until the end of 2026 being well below the historical 6.0% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 2.7% annually. Factoring in the forecast slowdown in growth, it seems obvious that Shell is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Shell. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Shell's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Shell going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Shell has 1 warning sign we think you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.