Shell Set to Outperform in 2025

Despite Q4 Previewed to be Weaker

As we look ahead to the remainder of 2025, the outlook for Shell may seem weaker than previously expected. However, we believe that Shell is well-positioned to outperform during this time, especially in a weaker commodity price environment. With valuation dropping to a ~16% FCF yield, Shell now boasts a record high ~50% discount compared to the broader sector. Distributions also remain attractive, with shares offering a >11% total yield including buybacks, which we believe are well-covered down to $65 Brent.

How This Will Impact Me

As an individual investor, Shell’s strong positioning for 2025 can potentially benefit me in terms of potential returns on my investment. The attractive valuation and high yield offer a promising outlook for the future, potentially leading to increased profits and dividends.

How This Will Impact the World

On a global scale, Shell’s outperformance in 2025 could have significant implications for the energy sector and the economy as a whole. A strong showing from Shell could boost confidence in the industry and contribute to overall market stability. Additionally, the company’s ability to thrive in a weaker commodity price environment could set a positive example for other players in the sector.

Conclusion

In conclusion, despite a weaker Q4 outlook, Shell’s prospects for 2025 look promising. With a solid valuation, attractive distributions, and a strong position to outperform in a challenging environment, Shell is well-equipped to weather any potential headwinds and deliver value to investors and the global market.