Shell plc (SHEL): A Bull Case Theory

We came across a bullish thesis on Shell plc on Investing With Purpose’s Substack. In this article, we will summarize the bulls’ thesis on SHEL. Shell plc’s share was trading at $71.44 as of September 18th. SHEL’s trailing and forward P/E were 15.95 and 10.76 respectively according to Yahoo Finance.

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Shell (SHEL) reported Q2 2025 results showing a decline in headline earnings, but the underlying operational strength remains evident. Adjusted EPS fell to $4.3B from $5.6B in Q1, and income attributable to shareholders was $3.6B, reflecting weaker Brent crude prices, which averaged $71.7/bbl in H1 versus $84.1/bbl last year.

Despite the earnings drop, Shell generated $11.9B in cash from operations and $6.5B in free cash flow, demonstrating its robust cash-generating ability. The company returned $5.7B to shareholders while maintaining a conservative gearing ratio of 19%, underscoring a balance sheet built for flexibility and resilience.

Segment performance mirrored the macro environment, with Integrated Gas and Upstream earnings down to $1.7B each from $2.5B and $2.3B, respectively, while Marketing showed strength, rising to $1.2B from $0.9B, reflecting downstream leverage in volatile markets. Chemicals & Products declined to $0.9B, and Renewables & Energy Solutions remained flat at $0.2B. Year-over-year, H1 2025 adjusted earnings totaled $9.8B, a 30% decline from $14.0B in H1 2024, primarily due to lower commodity prices and downstream margin compression.

Shell continues to execute strategic initiatives to enhance long-term value, including $3.9B in cost reductions, over 60% from structural and non-portfolio measures, and a reduction in operating expenses from $39.5B in 2022 to $34.6B on a rolling four-quarter basis. A key milestone was the delivery of its first LNG Canada cargo, giving Shell a strategic advantage in Asia-bound LNG exports. Overall, while headline profits softened, Shell’s cash generation, disciplined capital allocation, high-return projects, and resilient balance sheet position the company to outperform over the long term, making it a compelling story of durability and strategic execution.

Previously we covered a bullish thesis on Occidental Petroleum Corporation (OXY) by Magnus Ofstad in May 2025, highlighting its low-cost Permian Basin assets, diversified operations, and strategic carbon capture initiatives. The stock has appreciated approximately 10.03% since coverage, driven by operational improvements and long-term potential. The thesis still stands as OXY’s assets remain compelling. Investing With Purpose shares a similar perspective on Shell but emphasizes cash generation, balance sheet strength, and strategic execution.