Royal Dutch Shell Posts Strong Q3 Earnings, Dividend Hike


Oct. 29 2020, Updated 12:44 p.m. ET

At 10:48 a.m. ET on Thursday, Oct. 29, Royal Dutch Shell stock was up 6.3 percent after the company reported better-than-expected third-quarter earnings results. Shell also announced plans to raise its dividend to shareholders. We'll discuss the company's third-quarter highlights and outlook.

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What is Royal Dutch Shell’s stock news?

In the third quarter, Royal Dutch Shell reported an adjusted EPS of $955 million compared to $4.8 billion in the third quarter of 2019. The adjusted earnings have fallen significantly year-over-year. Oil and gas prices have remained lower and there has been weak demand. However, the adjusted EPS beat analysts’ average estimate of $594 million for the third quarter.

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The oil giant surprised investors with a dividend hike. Shell announced plans to increase its dividend by about 4 percent to 16.65 cents for the third quarter of 2020 and annually thereafter. In April, the company slashed its dividend from $0.47 to $0.16 per share. Shell cut its dividend amid the coronavirus pandemic. The COVID-19 pandemic caused a global collapse in oil demand.

In the third-quarter earnings release, Royal Dutch Shell CEO Ben van Beurden said, “Our sector-leading cash flows will enable us to grow our businesses of the future while increasing shareholder distributions, making us a compelling investment case.” He also said, “The strength of our performance gives us the confidence to lay out our strategic direction, resume dividend growth and to provide clarity on the cash allocation framework, with clear parameters to increase shareholder distributions.”

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What is Royal Dutch Shell's stock price today?

Royal Dutch Shell stock was up about 6.1 percent at $24.51 as of 11:15 a.m. ET on Oct. 29. The stock fell 4.5 percent on Oct. 28 and closed at $23.10 with a market capitalization of about $90 billion. The stock is trading 59.9 percent below its 52-week high of $61.17 and 15.3 percent above its 52-week low of $21.26. Year-to-date, the stock had fallen by 58 percent.

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Royal Dutch Shell stock on Stocktwits

Royal Dutch Shell stock has become a major talking point on Stocktwits and other social platforms. While some investors on Stocktwits see the strong third-quarter earnings results and dividend hike as a good reason to buy the stock, others were bearish and expect the stock to fall.

What is Royal Dutch Shell's stock forecast?

Currently, analysts' stock price forecast for Royal Dutch Shell is $39.21, which suggests a 60.1 percent upside. The highest target price of $48 implies a 96 percent upside, while the lowest target price of $30 suggests a 22.5 percent upside. Among the 11 Wall Street analysts tracking Royal Dutch Shell, ten recommend a buy and one recommends a hold. None of the analysts recommend a sell.

It might not be the right time to buy Royal Dutch Shell sock. Oil prices and the demand will likely remain low in the near term. The company might have to divest certain assets to invest in renewables and hike dividends more.


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