Current Price
$85.66
PE Ratio (TTM)
13.1x
Intrinsic Value
$122.37
+30.0% margin of safety
What Is Shell plc's Fair Value?
As of 2026-06-12, applying a 13.0x earnings multiple to Shell plc's (SHEL) earnings per share of $6.53 yields a fair value estimate of $122.37 per share, versus a market price of $85.66.
Fair value from earnings multiples is sensitive to the multiple you choose. Across the sensitivity grid the estimate spans $94.16 to $154.95. This is a relative estimate anchored to earnings, not a statement of fact. For a cash flow based view, see the intrinsic value estimate on the DCF page.
How our PE model works · Recalculate in PE mode · SHEL intrinsic value (DCF view)
Is Shell plc (SHEL) Overvalued?
At $85.66, SHEL trades about 30.0% below its PE-based fair value estimate, a modest discount to its earnings power, though not enough for us to call it cheap outright.
COMPETITIVE MOAT
↑Integrated Value Chain
Shell's upstream, midstream, and downstream operations create a synergistic advantage. This integration allows for cost efficiencies and greater control over product flow from extraction to consumer.
↑Global Scale and Infrastructure
Vast global presence and extensive infrastructure, including refineries and distribution networks, provide significant barriers to entry. This scale enables economies of scale and market access.
↑Diversified Energy Portfolio
While primarily oil and gas, Shell's growing investments in renewables and biofuels, like the Raizen venture, offer diversification. This strategy mitigates reliance on volatile fossil fuel markets.
INVESTMENT RISKS
↓Energy Transition Uncertainty
The global shift towards lower-carbon energy sources poses a long-term threat to traditional oil and gas demand. Shell faces significant strategic challenges in adapting its business model.
↓Geopolitical and Regulatory Volatility
Operations in diverse regions expose Shell to political instability and evolving environmental regulations. These factors can impact production, costs, and market access.
↓Commodity Price Fluctuations
Earnings are highly sensitive to volatile crude oil and natural gas prices. JPMorgan's note highlights vulnerability to geopolitical events impacting these prices.
Base case
SHEL base case PE valuation
Intrinsic Value
$122.37
Margin of safety
+30.0%
Expected annual return
+7.4%
Base case assumptions: 11.0% annual earnings growth, 13x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the SHEL PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Shell plc respond.
Open PE Calculator for SHELCompany Overview
Shell plc, a distinguished energy and petrochemical corporation, is headquartered in London, United Kingdom, and was originally founded in 1907. Known as Royal Dutch Shell plc until its name change in January 2022, the company maintains a formidable global presence, conducting operations across Europe, Asia, Oceania, Africa, and both North and South America. Its comprehensive business activities are categorized into several key divisions: Integrated Gas, Upstream, Marketing, Chemicals and Products, and Renewables and Energy Solutions. Shell's core operations involve the exploration for and extraction of crude oil, natural gas, and natural gas liquids. Beyond production, the company is deeply involved in the marketing, transportation, and strategic infrastructure development required to deliver these energy resources to consumers. This includes the manufacturing of gas-to-liquids fuels and a variety of other refined products. Shell also operates a substantial trading arm, dealing in commodities such as natural gas, liquefied natural gas (LNG), crude oil, electricity, and carbon emission rights. Its refining capabilities convert crude oil and various feedstocks into a wide range of essential products, including gasoline, diesel, aviation and marine fuels, lubricants, bitumen, and sulfur, while also developing low-carbon fuel alternatives. In the chemical sector, Shell is a significant producer of petrochemicals for industrial use, manufacturing base chemicals like ethylene, propylene, and aromatics, alongside intermediate chemicals such as styrene monomer, propylene oxide, and various solvents. The company also manages oil sands assets. Looking to the future of energy, Shell is actively investing in and developing renewable solutions. This includes generating electricity from wind and solar power, pioneering hydrogen production and sales, and establishing a network of electric vehicle charging services. Furthermore, Shell promotes LNG as a viable fuel source for heavy-duty transportation.
Financial Metrics — SHEL PE Stock Valuation Data
PE Ratio (TTM)
13.1x
PEG Ratio
0.26
Earnings Yield
7.62%
ROE (TTM)
10.6%
Revenue/Share (TTM)
$47.08
Dividend Yield
3.43%
Debt/Equity
0.44x
Frequently Asked Questions
What is the PE ratio of SHEL?
The trailing twelve-month PE ratio of SHEL reflects how much investors pay per dollar of Shell plc's earnings. This metric is most useful when compared to Oil & Gas Integrated peers and the company's own historical range.
Is SHEL overvalued based on PE ratio?
SHEL's PE of 13.1x combined with a PEG ratio of 0.26 provides a growth-adjusted perspective. A PEG below 1.0 suggests SHEL may be undervalued relative to its earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Oil & Gas Integrated, a DCF analysis may be more appropriate.
How do I value SHEL stock using PE ratio?
To value Shell plc using PE: (1) Compare the current PE (13.1x) against the Oil & Gas Integrated median to assess relative pricing, (2) check the PEG ratio (0.26) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of SHEL?
SHEL's PEG ratio is 0.26, calculated by dividing the PE ratio (13.1x) by the expected earnings growth rate. A PEG below 1.0 is traditionally considered a sign of undervaluation — the market may not be fully pricing in the growth potential. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for SHEL stock valuation?
PE ratio gives a quick relative read — how SHEL is priced versus Oil & Gas Integrated peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See SHEL DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Energy valuationsP/E and DCF value SHEL with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.