Shell Share Price Falls After Profit Miss, but Analyst Says Valuation Looks ‘Broadly Sustainable’

Shell (LON: SHEL) shares declined 3.4% on Thursday after the energy group reported a fourth-quarter profit miss and a rise in net debt, though Hargreaves Lansdown's head of equity research, Derren Nathan, said the company remains one of the sector’s stronger operators.

Fourth-quarter revenue fell to $64.1 billion from $66.3 billion, with declines across upstream, chemicals and products, and marketing. Underlying net profit dropped to $3.3 billion from $3.7 billion, falling short of consensus expectations of $3.5 billion.

Nathan said in a note following the report that “most of the miss” was driven by weaker gas prices and softer marketing margins.

Free cash flow halved to $4.3 billion and net debt rose by $6.9 billion to $45.7 billion. Despite the weaker numbers, Shell announced another $3.5 billion buyback and a 4% rise in the quarterly dividend to $0.372 per share. Capital expenditure for 2026 remains set at $20 billion to $22 billion, in line with last year. Shell shares were down 1.9% in early trading.

Hargreaves Lansdown believes the quarter “reflected a challenging picture” across extraction, refining and distribution, but stressed that Shell “is not a one-trick pony.”

The firm highlighted Shell’s market leadership in LNG and its ability to benefit from higher power demand linked to artificial intelligence.

While Shell’s valuation has moved above its long-term average, Hargreaves Lansdown feels it “looks broadly sustainable,” although upside for the share price appears limited unless commodity prices strengthen for an extended period.