SHEL
Shell plc
$106.66
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Moderate
·
Conviction
Fair Value
Trading 16.1% below fair value
You pay
$106.66
Bear
$71.39
Fair
$127.14
Bull
$194.44
Bear
$71.39
-33.1%
FCF $22782M × 12x
Fair
$127.14
+19.2%
FCF $26803M × 16x
Bull
$194.44
+82.3%
FCF $30823M × 20x
Adjust Assumptions
75.0$/bbl
16.0x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
13.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (13 analysts)
$102.53
Divergence from AlphaVal
24%
Summary
At $75/bbl oil with a 16x EV/FCF multiple, intrinsic value is $127.14 per share. Range: $71.39 (bear) to $194.44 (bull).
Warnings
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