Piper Sandler: 'Shell Plc. (SHEL) a Clear Stand-Out from 1Q Results'; PT Raised

Piper Sandler analyst Ryan Todd raised the price target on Shell Plc. (NYSE: SHEL) to $80.00 (from $72.00) while maintaining a Overweight rating.

The analyst commented: "Integrated Oils: Exiting 1Q results, PSC's commodity team has reduced its 2025/2026 commodity price outlook (Brent $63/$61/bbl vs. prior $74/$76/bbl), while raising mid-cycle natgas to $3.50/ mmbtu (vs. $3.25 prior). While we expect the combination of balance sheet, visible growth and resource depth will allow the IOCs to maintain an advantaged level of momentum through the potential weakness, and refining tailwinds offer a slight offset, we believe investors will increasingly focus on the risks to the current pace of shareholder distributions for the group, where we see CFO for the group only able to cover 25%/59% of the current buyback pace on average at $55/$65/bbl Brent. We view SHEL as the clear stand-out from 1Q results, and it is our top pick in the current environment.

With the exception of BP, where the balance sheet remains a significant overhang, the IOCs are well-prepared to weather a period of commodity price weakness. The debate is largely around how much will they have to (or should they) lean on the balance sheet to maintain current levels of share buyback. SHEL was unquestionably the stand-out in this regard from 1Q results, the only company in our coverage to cover capex/dividend/ buyback with CFO (~$2.0B of CFO to spare!)."

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