Shares of the UK-based Shell (GB:SHEL) fell by 1.6% as of writing after the company warned of lower gas production in the fourth quarter of 2024. Additionally, it announced that the trading in its Chemical division is expected to be much lower than in Q3 2024, due to seasonal factors. The company will announce its fourth-quarter results on January 30, 2025.
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Shell is a major oil and gas company offering various energy products, including fuels, oil, LPG, and lubricants.
Let’s take a look at more details.
Shell Predicts Weaker Gas Performance in Q4
For the fourth quarter, Shell reduced its gas production to range between 880 and 920 kboe/d (thousand barrels of oil equivalent per day), down from the previous estimate of 900 to 960 kboe/d. It is mainly due to scheduled maintenance at its Pearl plant in Qatar.
Additionally, LNG volumes are projected to fall in the range of 6.8 million to 7.2 million tonnes in Q4, down from 7.5 million tonnes in the third quarter. The company will also record non-cash, post-tax impairments between $1.5 billion and $3 billion, primarily related to European and North American assets.
Analysts Remain Bullish on Shell
Following the update, analyst Biraj Borkhataria from RBC Capital Markets reiterated his Buy rating on SHEL stock, predicting a growth rate of 36.19%. Borkhataria sees the update as unfavourable, with weakness in several divisions and lower trading in oil, gas, and power.
Similarly, analyst Giacomo Romeo from Jefferies maintained his Buy rating on SHEL stock and predicts an upside of 24.51%. Jefferies noted that consensus earnings may be reduced by as much as 10% from the current $5.4 billion.
Is Shell Stock a Good Buy Now?
Overall, analysts hold a bullish stance on SHEL stock, reflected in the Strong Buy rating on TipRanks. This is based on 10 Buy and three Hold recommendations. The Shell share price target of 3,106.23p implies an upside of 20.3% on the current price level.
