Shell Share Price: Q1 Profits Jump Beating Analysts’ Expectations

Shell share price ended the week slightly higher, erasing some of the losses it made in previous trading sessions. The British oil and gas major ended Friday’s trading session 1.92% higher at 2390.5p. Shell Plc has a total market cap of £159.77 billion.

Optimism Abound

Shell share price ended the week in the green after posting better-than-expected earnings for the first quarter. The British oil and gas company reported adjusted earnings of $9.6 billion in the March quarter, beating analysts’ estimates of $8 billion.

The company’s strong earnings from trading and higher liquified natural gas sales offset the easing energy prices over the quarter while extending its share repurchase program. The energy sector has benefited from strong demand and price volatility. Shell’s strong performance follows a string of record earnings posted by its rivals, including BP and Exxon Mobil.

Despite the record profits by the energy major, Shell shares slipped on the back of its slowed buyback program. The company announced $4 billion of share buybacks over the next three months, despite a dip in its cash generation to $14.15 billion, down from $22.4 billion in the December quarter. Shell kept its dividend unchanged at $0.2875 per share.

Shell’s Chief Executive Officer, Wael Sawan, promised to focus on the company’s performance to close the valuation gap between Shell and its US rivals, which are valued at higher multiples of their cash flow. To help do that, Shell committed to returning at least 20% to 30% of cash flow from operations to shareholders through dividends and buybacks.

Shell Share Price Outlook

Shell share price has been under intense pressure for the past few days amid increased volatility in oil prices. Shares of the British energy major nearly 9% from their highest level this year in March. The stock has remained below the 50-day and 100-day moving averages as highlighted on the daily chart. Its Relative Strength (RSI) has moved higher but remains below the neutral zone.

Therefore, the Shell share price outlook remains uncertain in the ensuing sessions as investors digest this week’s macroeconomic data. A move below the important support level at 2341.5p will see the bears take full control of the market, pushing the stock lower to find support at 2310.5p. However, a move below the key resistance level at 2445p will invalidate the bearish trajectory.

SHEL Price Chart

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