RBC Capital Markets analyst Biraj Borkhataria has maintained an Outperform rating for Shell PLC (SHEL) following the company’s first-quarter results, which revealed a revenue miss but exceeded earnings per ADS expectations. Shell reported revenue of $69.234 billion, falling short of the anticipated $79.13 billion consensus. Despite this revenue shortfall, the company’s adjusted earnings per ADS reached $1.84, surpassing the consensus estimate of $1.65. The analyst highlights the company’s strategic stability and commitment to shareholder distributions, underpinned by a robust balance sheet. This financial strength provides confidence that Shell will continue its share repurchase program, a key driver for accelerated earnings per share growth in the long term. Borkhataria anticipates that Shell’s planned divestments in its upstream operations in Nigeria will lead to significant cost reductions, further bolstering the company’s financial performance. A particularly noteworthy element of the strategy is the anticipated sale of the Chemicals division, which the analyst believes will eliminate a previously unprofitable asset from Shell’s financial statements, representing a substantial positive for investors. The analyst acknowledges that Shell’s marketing business is demonstrating improving underlying performance, a welcome development considering the segment’s weaker profitability in recent years. However, reflecting broader industry trends, Borkhataria has revised downward the 2026 estimates. He remains cautiously optimistic regarding the Chemicals segment’s future. The analyst has increased the 2025 EPS estimates to $3.28 (from $3.04) and the 2026 estimates to $3.74 (from $3.72).

Investors seeking exposure to Shell PLC can consider the Precidian ETFs Trust Shell plc ADRhedged (SHEH) and Abacus FCF Real Assets Leaders ETF (ABL). Shell’s shares experienced a decline of 1.77% on Monday, closing at $65.46. This volatility underscores the dynamic nature of the energy sector. The company’s strategic moves, particularly the divestments and anticipated sale of the Chemicals division, are central to its plan for improved profitability and shareholder value. Looking ahead, Shell’s focus on operational efficiency and strategic asset sales appear poised to reshape the company’s financial outlook. The continued monitoring of industry trends and Shell’s ability to execute its divestment strategy will be crucial factors influencing investor sentiment. The analyst’s revised estimates and maintained Outperform rating reflect a balanced assessment of Shell’s current position and future potential within the evolving energy landscape. Investors are advised to carefully consider these developments alongside broader market conditions when making investment decisions.

The sale of the Chemicals division is expected to significantly improve the company's bottom line, addressing a previously concerning area of underperformance. Furthermore, the continued investment in upstream operations, coupled with the strategic divestments, demonstrate a commitment to optimizing Shell’s portfolio for sustainable growth. The company’s proactive approach to managing its assets and adapting to market dynamics is a key factor driving the analyst’s positive outlook. The anticipated cost reductions from the Nigerian divestments will contribute directly to enhanced profitability, while the Chemicals division sale removes a drag on overall financial performance. The marketing business’s improved performance further strengthens this positive outlook, indicating a return to greater operational effectiveness. These combined elements suggest a pathway towards improved shareholder returns and a more resilient financial foundation for Shell PLC. The analyst’s confidence in Shell’s strategic direction is reinforced by the company’s robust balance sheet and commitment to disciplined capital allocation. The 2025 and 2026 EPS revisions reflect a realistic assessment of the company’s potential, aligning with industry trends and Shell’s strategic initiatives. The ongoing monitoring of the energy sector and Shell’s adaptive strategy will be crucial in determining the long-term success of this transformation.