Shares of Shell PLC edged higher in London trading, moving closer to their 52-week high following the announcement of a substantial new capital return initiative. The energy major commenced a $3.5 billion share buyback program, scheduled to conclude by May 1, with all repurchased shares slated for cancellation.
Earnings and Analyst Sentiment
Shell disclosed fourth-quarter adjusted earnings of $3.26 billion and declared a quarterly dividend of $0.372 per share. For the full year 2025, the company posted adjusted earnings of $18.53 billion, supported by $42.86 billion in cash flow from operations. Analyst commentary remained supportive; JPMorgan reaffirmed its Overweight rating and 3,200 pence price target, emphasizing the firm's commitment to capital returns. Similarly, DZ Bank increased its fair value estimate to 37 euros, retaining a Buy recommendation.
Strategic and Operational Context
The renewed buyback focus comes amid a backdrop of moderating oil and gas prices, with investors closely monitoring payout sustainability across the sector. Shell's Chief Financial Officer, Sinead Gorman, characterized the company's return framework as "sacrosanct." However, performance in the fourth quarter faced pressure from softer trading results and narrower refining and chemical margins. Looking ahead, the company has paused new investment in Kazakhstan due to ongoing cost disputes, with CEO Wael Sawan noting the situation impacts future investment appetite there.
In a separate governance move, Shell's board approved the appointment of PricewaterhouseCoopers as its new external auditor, effective for the financial year ending December 31, 2027, pending shareholder approval at the 2027 annual meeting. Market attention now turns to the first-quarter 2026 results in May, which will provide the next update on the buyback program and operational performance.
