SHEL
Shell plc
$85.71
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Mild
·
Conviction
Fair Value
Trading 12.8% below fair value
You pay
$85.71
Bear
$53.02
Fair
$98.29
Bull
$152.92
Bear
$53.02
-38.1%
FCF $18546M × 12x
Fair
$98.29
+14.7%
FCF $21819M × 16x
Bull
$152.92
+78.4%
FCF $25092M × 20x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
14.5x
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 $101.60 from 13 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $98.29 per share.
Warnings
Debt per share ($26.38) 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