In major news on UK stocks, energy giant Shell’s (NYSE:SHEL) (GB:SHEL) shares surged by 1.6% as of writing after Reuters reported that the company is in talks with Saudi Aramco regarding the sale of its petrol stations in Malaysia. Both companies refused to give their official statements. Reportedly, the potential value of the deal could be $1 billion. Reuters added that these discussions commenced in late 2023, with the possibility of a deal materializing in the coming months.
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The sale is aligned with Shell’s strategy to streamline its operations and prioritize its most profitable ventures. Shell has announced plans to divest 500 gas stations in 2024 and 2025. Currently, the company owns around 950 petrol stations in Southeast Asia.
Shell is a prominent oil and gas corporation, offering a wide range of energy products. Meanwhile, Saudi Aramco is a state-owned energy enterprise and holds the distinction of being the world’s largest integrated energy and chemicals company.
What’s Driving Shell’s Share Price Lately?
The speculative reports fueled upward momentum for Shell stock, building on the gains observed last week following the release of the company’s Q1 results. Since the Q1 results, SHEL stock has gained over 2.5% in trading.
The company reported adjusted earnings of $7.7 billion in the first quarter of 2024, compared to analysts’ consensus estimate of $6.5 billion. However, earnings declined by nearly 20% compared to Q1 2023, primarily due to a decrease in gas prices. Additionally, Shell unveiled a $3.5 billion share buyback program, expected to be finalized over the next three months.
Following the Q1 results, many analysts have expressed their bullish take on numbers and potential share price growth, with nine analysts confirming their Buy ratings on Shell stock.
Is Shell a Good Stock to Buy?
Overall, SHEL stock has a Strong Buy consensus rating on TipRanks based on 10 Buy and two Hold recommendations. The Shell share price target of 3,196.04p implies a 10% increase on the current price level.
