Shell plc (SHEL)

Stockchase Research Editor: Michael O'Reilly

We reiterate SHEL as a TOP PICK.  The new CEO re-committed to deploying capital into the highest returns that play to their strengths.  This is after the previous CEO vowed to reduce production annually through 2030.  Cash reserves are growing and the company is generating $45 billion in free cash flow annually.  It trades at 6x earnings, at book value, and supports a 23% ROE.  We continue to recommend a stop-loss at $55, looking to achieve $72 --upside potential of 22%.  Yield 1.8%

(Analysts’ price target is $72.40)

Stockchase Research Editor: Michael O’Reilly

We reiterate SHEL, an ideal international diversified energy play, operating in over 70 countries, in everything from wind farms to renewable natural gas as a TOP PICK.  It trades at 6x earnings, just over 1x book value,  and supports a ROE of 23%. The company is generating great cash flow allowing cash reserves to grow, while aggressively retiring debt and buying back shares.  We recommend trailing up the stop (from $52) to $55, looking to achieve $71 -- upside over 19%. Yield 3.4%

(Analysts’ price target is $70.52)

Stockchase Research Editor: Michael O'Reilly SHEL is the ideal international diversified energy play, operating in over 70 countries, in everything from wind farms to renewable natural gas. It trades at 5x earnings and 1.1x book value and supports a ROE of 23%. The company has been prudently using some of its cash reserves to aggressively retire debt and buy back shares. It pays a good dividend, backed by a payout ratio under 20% of cash flow. We recommend placing a stop-loss at $52, looking to achieve $68 -- upside over 20%. Yield 3.54% (Analysts’ price target is $67.69)

(A Top Pick Jun 30/22, Down 8.2%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with SHEL has triggered its stop at $48. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 3%, when combined with the previous buy recommendations.

Stockchase Research Editor: Michael O'Reilly We again reiterate SHEL as a TOP PICK. With energy again being viewed as strategic asset, especially within Europe, the company is well positioned. It trades at 9x earnings compared to peers at 13x and is valued at only 1.2x book. It pays a good dividend, backed by a payout ratio under 40% of cashflow. We like how management has focused on aggressively retiring debt and buying back shares, while still building on cash reserves. We recommend trailing up the stop (from $45) to $48, looking achieve $70 -- upside potential over 33%. Yield 3.76% (Analysts’ price target is $69.64)