What Is Moving Shell’s Share Price This Year?

The first few months of 2025 has seen Shell's share price (LON: SHEL) climb 7.96%, albeit seemingly stuck in a trading range that has held for the past 6 months or so. While the current price remains below the 52-week high of 2,961.00p set last May, the solid upward trend over recent months indicates a further test may be on the horizon.

Shell's recent financial performance has been a little mixed. While Q4 2024 revenue beat expectations, reaching £52.98 billion, the reported EPS of £1.20 fell short of the anticipated £1.74.

All eyes are now on the upcoming Q1 2025 earnings release, scheduled for May 2, 2025, with analysts projecting an improved EPS of £1.75 and revenue of £62.56 billion. A key element of Shell's appeal to investors is its consistent dividend, currently yielding 4.08%. The reported 2024 dividend of 1.39 USD represented a 7.46% increase year-over-year, and further growth is anticipated.

Strategic Developments

Beyond the numbers, Shell is undergoing a period of significant strategic transformation. The recent completion of the sale of The Shell Petroleum Development Company of Nigeria Limited (SPDC) to Renaissance is a prime example. This divestment signals a clear shift away from onshore oil production in the Niger Delta, allowing Shell to concentrate on its more profitable Deepwater and Integrated Gas operations within Nigeria.

This move aligns with a broader industry trend of streamlining portfolios and focusing on assets with higher margins and lower operational risk. It also speaks to Shell's evolving approach to environmental, social, and governance (ESG) considerations, as the company navigates the complex transition towards a lower-carbon future.

The company has also announced its Final Investment Decision (FID) for the Gato do Mato deep-water project, located in Brazil's Santos Basin. This decision marks a significant advancement for the project, which is a consortium effort involving Shell (holding a 50% stake), Ecopetrol (30%), and TotalEnergies (20%).

The Gato do Mato development is set to feature a Floating Production Storage and Offloading (FPSO) vessel with the capability to produce up to 120,000 barrels of oil per day. The project is targeting an estimated recoverable resource of approximately 370 million barrels. Operations are slated to commence in 2029.

Initially, the operations will focus on natural gas reinjection to maintain reservoir pressure, with a future possibility of exporting gas onshore. The project encompasses two blocks, BM-S-54 and Sul de Gato do Mato, situated offshore of Rio de Janeiro, at water depths ranging from 1,750 to 2,050 meters.

Zoë Yujnovich, Shell's Integrated Gas and Upstream Director, has emphasized the ongoing investment in increasingly efficient projects such as Gato do Mato. This aligns with Shell's strategy as the largest foreign producer in Brazil, aiming to ensure significant production contributions to its portfolio well into the 2030s and beyond.

Outlook

Operational successes are also solidified by the “Buy” consensus from analysts, who have set an ambitious average target price of 3,434.12p– a potential upside exceeding 30% from current levels. Even more conservative estimates point to a minimum increase of over 17%.

Looking further ahead, Shell is reportedly aiming for substantial growth in upstream output by 2029. This commitment to core operational areas, coupled with projections of a significant increase in global demand for liquefied natural gas (LNG) by 2040, suggests a long-term strategy focused on capitalizing on evolving energy needs. Some analysts are even predicting a share price exceeding $186 by 2030, highlighting the potential for substantial long-term gains.

However, it's crucial to acknowledge the inherent risks within the energy sector. Geopolitical instability, fluctuating oil and gas prices, and the accelerating transition to renewable energy sources all pose potential challenges to Shell's future performance. While the current outlook is undeniably positive, investors must remain vigilant and aware of the dynamic landscape in which Shell operates.