Shell Reports Weak Q4 2025 Earnings Amid Lower Crude Prices
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3d ago
0mins
Should l Buy SHEL?
Source: Benzinga
- Weak Earnings Report: Shell's adjusted earnings for Q4 2025 came in at $1.14 per ADS, surpassing the consensus estimate of $0.63, yet the overall profit marked the lowest in nearly five years, reflecting pressures from lower crude prices and unfavorable tax adjustments.
- Revenue and Cash Flow: The company's revenue stood at $64.09 billion, falling short of analysts' forecast of $64.61 billion, although operational cash flow reached $9.4 billion, the overall profitability was impacted by declining marketing margins and rising operating costs.
- Shareholder Return Plan: Shell announced a $3.5 billion share buyback program and increased its dividend by 4% to 37.2 cents per share, indicating a commitment to shareholder returns despite financial pressures.
- Future Outlook: Shell expects Integrated Gas production to range between 920,000 to 980,000 boe/d in Q1 2026, and despite market challenges, management remains optimistic about future capital expenditures and operational performance.
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Analyst Views on SHEL
Wall Street analysts forecast SHEL stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for SHEL is 74.27 USD with a low forecast of 41.75 USD and a high forecast of 91.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
10 Analyst Rating
5 Buy
5 Hold
0 Sell
Moderate Buy
Current: 74.630
Low
41.75
Averages
74.27
High
91.00
Current: 74.630
Low
41.75
Averages
74.27
High
91.00
About SHEL
Shell plc is an international energy company engaged in the principal aspects of the energy and petrochemical industries. The Company's segments include Integrated Gas, Upstream, Marketing, Chemicals and Products, Renewables and Energy Solutions, and Corporate. The Integrated Gas segment includes liquefied natural gas (LNG), conversion of natural gas into gas-to-liquids (GTL) fuels and other products. It includes natural gas and liquids exploration and extraction, and the operation of the upstream and midstream infrastructure. The Upstream segment includes exploration and extraction of crude oil, natural gas and natural gas liquids. It also markets and transports oil and gas and operates the infrastructure necessary to deliver them to the market. The Marketing segment comprises the Mobility, Lubricants, and Sectors & Decarbonization businesses. The Chemicals and Products segment includes chemicals manufacturing plants with their own marketing network, and refineries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Current Auditor Continuation: Ernst & Young (EY) will continue as Shell's external auditor for the financial year ending December 31, 2026, also subject to shareholder approval at the 2026 AGM, ensuring continuity in audit services.
- Audit Report Quality: Over the past two years, EY issued only unqualified reports on Shell's consolidated financial statements and internal control effectiveness, with no disagreements on accounting matters or disclosures, indicating stable audit quality.
- Tender Process Transparency: Audit tender participants were informed of the outcome on February 5, 2026, and further details regarding the tender process will be included in Shell's 2025 Annual Report and Form 20-F, enhancing corporate governance transparency.
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- Revenue and Cash Flow: The company's revenue stood at $64.09 billion, falling short of analysts' forecast of $64.61 billion, although operational cash flow reached $9.4 billion, the overall profitability was impacted by declining marketing margins and rising operating costs.
- Shareholder Return Plan: Shell announced a $3.5 billion share buyback program and increased its dividend by 4% to 37.2 cents per share, indicating a commitment to shareholder returns despite financial pressures.
- Future Outlook: Shell expects Integrated Gas production to range between 920,000 to 980,000 boe/d in Q1 2026, and despite market challenges, management remains optimistic about future capital expenditures and operational performance.
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- Current Auditor Continuation: Ernst & Young (EY) will continue as Shell's external auditor for the financial year ending December 31, 2026, also subject to shareholder approval at the 2026 AGM, ensuring continuity in audit services.
- Audit Report Quality: Over the past two years, EY issued only unqualified reports on Shell's consolidated financial statements and internal control effectiveness, with no disagreements on accounting matters or disclosures, indicating stable audit quality.
- Tender Process Transparency: Audit tender participants were informed of the outcome on February 5, 2026, and further details regarding the tender process will be included in Shell's 2025 Annual Report and Form 20-F, enhancing corporate governance transparency.
See More
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- LNG Project Progress: ConocoPhillips highlighted advancements in liquefied natural gas (LNG) initiatives, including developments in Qatar and the Port Arthur LNG project, indicating a strategic pivot towards global gas markets that is expected to positively influence future earnings.
- ETF Investment Trends: Many flagship energy funds are heavily weighted towards large integrated producers, while globally focused products like the iShares Global Energy ETF (NYSE:IXC) include international LNG leaders such as Shell, providing investors with indirect exposure to the expanding global gas trade.
- Stable Shareholder Returns: Despite earnings pressures, shareholder payouts remain robust across the energy sector, with dividends and share repurchases by large producers continuing to enhance the yield profile of energy ETFs, indicating a transition in the sector rather than deterioration.
See More
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- Earnings Decline: Shell (SHEL) reported a Q4 adjusted net income of $3.26 billion, an 11% year-over-year drop that fell short of the $3.5 billion analyst consensus, indicating that a 2% production increase was insufficient to enhance profitability, potentially raising scrutiny on CEO Wael Sawan.
- Shareholder Returns: Despite disappointing earnings, Shell maintained its $3.5 billion quarterly buyback program and raised its dividend by 4% to $0.372 per share, resulting in shareholder payouts totaling 52% of operating cash flow over the last four quarters, exceeding the company's target range of 40%-50%.
- Rising Operating Costs: Analysts expressed concerns over Shell's increasing operating expenses, suggesting that the sustainability of the buyback program could be jeopardized without improved financial performance, which may impact investor confidence moving forward.
- Declining Reserve Life: Shell's reserve life decreased from 8.9 years in 2024 to 7.8 years, primarily due to asset sales in Nigeria and oil sands, leading analysts to anticipate increased scrutiny regarding Shell's M&A reserve replacement strategy.
See More
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- Earnings Focus: Amazon.com Inc. (NASDAQ:AMZN) is set to report earnings after the bell, with analysts expecting $1.97 per share on revenue of $211.32 billion, which could significantly influence market sentiment depending on the results.
- Jobless Claims Insight: The latest weekly jobless claims report will be released on Thursday morning, and market participants will closely monitor this data to assess the durability of the U.S. labor market, potentially impacting the Federal Reserve's monetary policy decisions.
- Bond Yield Trends: The 10-year Treasury bond yielded 4.27%, while the two-year bond stood at 3.55%, indicating market expectations regarding interest rate policies, with the CME Group's FedWatch tool showing a 90.1% likelihood of the Federal Reserve keeping rates unchanged in March.
See More
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- Weak Earnings Report: Shell's adjusted earnings for Q4 2025 came in at $1.14 per ADS, surpassing the consensus estimate of $0.63, yet the overall profit marked the lowest in nearly five years, reflecting pressures from lower crude prices and unfavorable tax adjustments.
- Revenue and Cash Flow: The company's revenue stood at $64.09 billion, falling short of analysts' forecast of $64.61 billion, although operational cash flow reached $9.4 billion, the overall profitability was impacted by declining marketing margins and rising operating costs.
- Shareholder Return Plan: Shell announced a $3.5 billion share buyback program and increased its dividend by 4% to 37.2 cents per share, indicating a commitment to shareholder returns despite financial pressures.
- Future Outlook: Shell expects Integrated Gas production to range between 920,000 to 980,000 boe/d in Q1 2026, and despite market challenges, management remains optimistic about future capital expenditures and operational performance.
See More
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- Dividend Declaration: Shell has declared a dividend of $0.744 per ADS, a move aimed at maintaining investor confidence and providing stable cash flow despite facing market pressures and missing earnings expectations.
- Earnings Miss: The company's financial report indicates that both revenue and profit fell short of market expectations, reflecting uncertainties in the global energy market and challenges in cost control, which could impact future investment decisions.
- Outlook Initiation: Shell has initiated its outlook for Q1 and FY26, and while current performance is disappointing, the company aims to improve future financial results through strategic adjustments and market adaptability.
- Green Hydrogen Projects: Shell's green hydrogen initiatives in the EU are viewed as another failing investment, as ongoing expenditures raise questions about the feasibility and profitability of these projects, potentially affecting its strategic positioning in the renewable energy sector.
See More
