Citi has reiterated its 'neutral' rating on Shell PLC (LSE:SHEL, NYSE:SHEL) with a £26.50 target price, saying the company’s robust balance sheet leaves it well placed to keep rewarding shareholders even as questions persist over long-term growth.
Third-quarter results came in slightly ahead of expectations, helped by strong realised margins in the core upstream division. Citi noted that consensus forecasts had already moved higher following Shell’s recent trading update, meaning the outperformance was modest but reassuring.
Leverage fell marginally quarter on quarter and remains among the lowest in the global oil major peer group.
Citi said that gives Shell the flexibility to maintain high levels of buybacks and dividends while also keeping optionality for potential acquisitions should oil prices weaken.
The bank described the financial structure as “a transparent offering to investors,” underpinned by disciplined capital allocation and a focus on cash returns.
However, it added that investors remain cautious about Shell’s medium-term growth profile, given the limited visibility on new projects and the company’s measured pace in expanding its low-carbon businesses.
Citi said Shell’s focus on shareholder returns is likely to continue dominating the investment case for now, but the shares may struggle to re-rate without clearer evidence of portfolio renewal or strategic progress beyond the current oil and gas cycle.