Shell Stock: Price Range Forecast ahead of Q1 Earnings



Implied volatility in Shell

In this post, we’ll look at Royal Dutch Shell’s (RDS.A) stock price forecast range for ten days ahead of its earnings. This price forecast will be based on the latest implied volatility in Shell. Shell is expected to post its Q1 2019 earnings on May 2.

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Implied volatility in Shell has risen by 1.4 percentage points over March 22, 2019, to the current level of 18.4%. In the same period, Shell stock has increased 3.8%.

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Shell’s stock price forecast range ahead of its earnings release

In forecasting Shell’s stock price range, we’ve considered Shell’s implied volatility of 18.4% and assumed a normal distribution of prices (the bell curve model) with a standard deviation of one (with a probability of 68.2%). So, with the stated consideration and assumption, Shell’s stock price could close between $67.2 and $63.3 per share in the next ten calendar days ending on May 2, 2019, which is Shell’s Q1 2019 earnings release day.

Implied volatility in peers

Implied volatility in BP (BP) has also risen by 0.5 percentage points over March 22 to 17.9%. Also, implied volatility in YPF (YPF) and Suncor Energy (SU) has increased by 2.1 percentage points and 0.7 percentage points, respectively, in the period. YPF and Suncor’s implied volatilities currently stand at 39.1% and 21.8%, respectively.

Based on these integrated energy firms’ stock prices, BP, YPF, and Suncor have risen 2.5%, 4.7%, and 0.9%, respectively, since March 22.


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