Shell Chemical Division Sale To Improve Bottom Line: Analyst

RBC Capital Markets analyst Biraj Borkhataria reiterated the Outperform rating on Shell PLC SHEL following Friday’s first-quarter results.

The company reported revenue of $69.234 billion, which missed the consensus of $79.13 billion. Adjusted earnings per ADS of $1.84 exceeded the consensus of $1.65.

The company expects 2025 cash capital expenditures to be  $20 billion—$22 billion.

For the second quarter, it expects production at Integrated Gas of approximately 890 – 950 thousand boe/d and Upstream of about 1,560 – 1,760 thousand boe/d.

Shell management commentary offers a sense of stability regarding the execution of strategic objectives and shareholder distributions, the analyst says.

A robust balance sheet provides confidence that the company will likely maintain its share repurchase program, Borkhataria says.

This consistent buyback activity should contribute to accelerated earnings per share growth over the long term, adds the analyst.

Going forward, the analyst expects Shell’s planned divestments in its upstream operations in Nigeria to lead to further cost reductions.

Additionally, the anticipated sale of the Chemicals division should eliminate a currently unprofitable asset from its financial statements, adds the analyst.

Borkhataria writes that Shell’s marketing business’s improving underlying performance is a positive sign, particularly given its weaker profitability in recent years.

The analyst lowered the 2026 estimates to reflect prevailing broader industry trends while remaining somewhat cautious regarding the Chemicals segment.

Overall, Borkhataria raised EPS estimates to $3.28 (from $3.04) for 2025 and $3.74 (from $3.72) for 2026.

Investors can gain exposure to Shell via Precidian ETFs Trust Shell plc ADRhedged SHEH and Abacus FCF Real Assets Leaders ETF ABLD.

Price Action: SHEL shares are down 1.77% at $65.46 at the last check Monday.

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