Shell at $97.80 needs about $29 billion of 2027 adjusted earnings at 9.8 times. That is what I forecast once Brent and Asian LNG prices ease. The target is $102.43, close to the price, so Hold.
Key points
- $29 billion is my 2027 adjusted earnings estimate, against $39 billion if Q2 2026 repeated four times.
- 9.4 times earnings is what $97.80 costs on that estimate, with a 3.1% dividend yield.
- $102.43 per ADS is my 12-month target, 5% above the price.
The call
The price needs earnings to stay far above normal. Brent was $114 a barrel and Asian LNG $26 per million BTU in the latest readings. Q2 2026 adjusted earnings were $9.8 billion.
I expect a fade, not a collapse. Qatar supply returns, new US LNG arrives and Q2 gains from trading and working capital do not repeat. ARC adds production, about 4% a year growth through 2030, and shares issued dilute it.
12-month value per ADS by 2027 adjusted earnings ($)Analyst arithmetic at 9.8 times earnings; price $97.80 on Oct 7, 2026
Valuation
| Item | Figure |
|---|
| 2027 adjusted earnings | $29 billion |
| Ordinary shares, end 2027 | 5.55 billion |
| Earnings per ADS (2 shares) | $10.45 |
| Multiple | 9.8 times |
| Target per ADS | $102.43 |
Shell has traded near 8 to 10 times earnings in this kind of price cycle, so 9.8 is fair for a gas-heavy mix. At $24 billion the value is $85. At $36 billion it is $127. That spread is balanced, with the dividend adding about 3%, so the stock tracks the market.
Risks
- Commodity prices fall faster than I expect. Watch Brent below $90 and JKM below $15.
- ARC integration costs and debt. Watch the October 29 net debt and purchase-price allocation.
- Gulf storm shut-ins and legal cases (Groningen, Nigeria). Watch restart news and Q3 cash flow.
What would change my mind
Q3 results showing recurring cash flow of at least $14 billion a quarter with Brent near $100 would lift my earnings estimate toward $36 billion.