Editing Shell plc
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| [[Shell US]]}}|website={{URL|https://www.shell.com}}|footnotes=References: <ref> {{cite web |title=Shell begins trading under simpler, single-line share structure |url=https://www.reuters.com/business/energy/shell-begin-trading-under-simpler-single-line-share-structure-2022-01-31/ </ref>}} | | [[Shell US]]}}|website={{URL|https://www.shell.com}}|footnotes=References: <ref> {{cite web |title=Shell begins trading under simpler, single-line share structure |url=https://www.reuters.com/business/energy/shell-begin-trading-under-simpler-single-line-share-structure-2022-01-31/ </ref>}} | ||
Shell plc | Shell plc operates as an energy and petrochemical company in Europe, Asia, Oceania, Africa, the United States, and Rest of the Americas. The company operates through Integrated Gas, Upstream, Marketing, Chemicals and Products, and Renewables and Energy Solutions segments. The Integrated Gas segment manages liquefied natural gas (LNG) activities, while the Upstream segment focuses on exploration and extraction of oil and gas reserves. The Downstream segment handles activities related to oil products and chemicals, including commodities trading. The Corporate segment includes holdings, treasury, and central functions. It explores for and extracts crude oil, natural gas, and natural gas liquids; markets and transports oil and gas; produces gas-to-liquids fuels and other products; and operates upstream and midstream infrastructure necessary to deliver gas to market. The company also markets and trades natural gas, liquefied natural gas (LNG), crude oil, electricity, carbon-emission rights; and markets and sells LNG as a fuel for heavy-duty vehicles and marine vessels. In addition, it trades in and refines crude oil and other feed stocks, such ase low-carbon fuels, lubricants, bitumen, sulphur, gasoline, diesel, heating oil, aviation fuel, and marine fuel; produces and sells petrochemicals for industrial use; and manages oil sands activities. Further, the company produces base chemicals comprising ethylene, propylene, and aromatics, as well as intermediate chemicals, such as styrene monomer, propylene oxide, solvents, detergent alcohols, ethylene oxide, and ethylene glycol. Additionally, it generates electricity through wind and solar resources; produces and sells hydrogen; and provides electric vehicle charging services, as well as electricity storage. The company was formerly known as Royal Dutch Shell plc and changed its name to Shell plc in January 2022. Shell plc was founded in 1907 and is headquartered in London, the United Kingdom. | ||
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With a history dating back to 1907, Shell is headquartered in The Hague, Netherlands. The company has a workforce of approximately 93,000 employees. Shell is committed to supporting the transition to a net-zero emissions future and supplies a range of energy sources. The company places importance on its role in local communities and strives to safeguard them for future generations. | |||
== Industry Overview & Market Opportunity == | == Industry Overview & Market Opportunity == | ||
The energy market plays a crucial role in the global economy, and its dynamics are shaped by a combination of factors, including technological advancements, policy changes, environmental concerns, and geopolitical developments. | The energy market plays a crucial role in the global economy, and its dynamics are shaped by a combination of factors, including technological advancements, policy changes, environmental concerns, and geopolitical developments. | ||
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Shell decreased carbon emissions by 30% during the period 2016-2022, in contrast, global carbon emissions increased by 4%. Shell has made strong progress on it's aims to be carbon neutral by 2050, including announcing up to $15 billion in low carbon investments, such as $1 billion a year in carbon capture and storage in 2024-2025. | Shell decreased carbon emissions by 30% during the period 2016-2022, in contrast, global carbon emissions increased by 4%. Shell has made strong progress on it's aims to be carbon neutral by 2050, including announcing up to $15 billion in low carbon investments, such as $1 billion a year in carbon capture and storage in 2024-2025. | ||
'''Relative Valuation''' | '''Relative Valuation''' | ||
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Based on these sources, it appears that Shell plc is considered undervalued in relative valuation compared to the current market price. | Based on these sources, it appears that Shell plc is considered undervalued in relative valuation compared to the current market price. | ||
By using similar methods to calculating Shell's valuation, we have concluded a comparison between ExxonMobil Corporation (XOM) and Shell plc regarding their relative valuation: | |||
* Market Cap and Enterprise Value: | |||
** Shell plc: The market cap of Shell plc ranges from $200.53 billion to $207.49 billion, and its enterprise value ranges from $243.60 billion to $251.22 billion. | |||
** Exxon Mobil: The market cap of Exxon Mobil is $428.44 billion, and its enterprise value is $437.23 billion. | |||
* Trailing P/E and Forward P/E: | |||
** Shell plc: The trailing P/E ratio for Shell plc ranges from 5.05 to 5.12, and the forward P/E ratio ranges from 5.31 to 6.72. | |||
** Exxon Mobil: The trailing P/E ratio for Exxon Mobil is 7.17, and the forward P/E ratio is 10.93. | |||
* Return on Equity (ROE) and Operating Margin: | |||
** Shell plc: Shell plc has a ROE of 23.30% and an operating margin of 17.61%. | |||
** Exxon Mobil: N/A. | |||
On the US market, Exxon are valued at about six times their cash flow, compared with about three times for Shell. We also conclude that ExxonMobil is undervalued by approximately 2%, which is much lower than Shell's, suggesting that Shell is undervalued comparing to their competitors and the findings also supports the results of DCF. | |||
== References and notes == | == References and notes == |