SHEL
Shell plc
$88.38
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Moderate
·
Conviction
Fair Value
Trading 18.6% below fair value
You pay
$88.38
Bear
$59.73
Fair
$108.60
Bull
$167.56
Bear
$59.73
-32.4%
FCF $20329M × 12x
Fair
$108.60
+22.9%
FCF $23916M × 16x
Bull
$167.56
+89.6%
FCF $27503M × 20x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
13.4x
Summary
Our base-case estimate uses a valuation based on free cash flow under different commodity price assumptions and a valuation multiple. We then blend that result with the average analyst price target of $100.68 from 13 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $108.60 per share.
Warnings
Debt per share ($26.67) is significant relative to the stock price. Even small changes in the debt figure meaningfully shift what each share is worth.
Where you think oil prices will settle long-term drives over 80% of this valuation. The biggest risk isn't the company itself — it's getting the commodity price wrong.
Key Risks
- Growth DCF inappropriate — commodity volumes do not compound
- Geopolitical premiums are real but historically temporary
- Reserve replacement ratio below 100% for 3 years is existential