Shell PLC (LSE:SHEL, NYSE:SHEL) is firmly entrenched as one of RBC's top thirty investment ideas after its third-quarter update, with its appeal underpinned by what the Canadian bank describes as a "fortress balance sheet".
Notable in the latest numbers was that the earnings beat was not driven by a single division but broad-based, RBC adds.
Commentary around shareholder returns remains supportive for the shares and Shell's balance sheet should provide optionality in a potential downturn.
Net debt (ex-leases) is now just below US$9 billion, the lowest level for more than ten years, RBC adds.
“This should provide the foundation to continue share buybacks even in a weaker macro scenario, and we expect the contrast vs the peer group to become clearer through 2025.”
Outperform with a 3,500p target is the view.
Jefferies, too, is impressed with the financial firepower possessed by the Anglo-Dutch giant, though its view is only 'neutral' with a 3,100p target.
“Results and comments on the call confirmed our view of Shell as the IOC [oil giant] with the most sustainable capital allocation policy.”
One wrinkle highlighted by the US broker is the ruling expected in a Dutch court on 12 November on its environmental policies, though Jefferies says whatever the outcome the case will go to a final appeal.
Shares today were 2,589p.