Shell: Better Cash Flow, More Growth and Still Cheaper Than Its U.S. Peers
Summary
I am retaining my Strong Buy rating on Shell (NYSE: SHEL) following Q2 2026. The previous thesis centered on stronger operating discipline, structural cost reductions, LNG and deepwater growth, and consistent shareholder returns. Q2 provides stronger evidence that these changes are translating into earnings and cash flow.
Q2 Adjusted Earnings reached $9.8 Bn, Adjusted EBITDA was $20.7 Bn, and CFFO reached $21.4 Bn. Free cash flow was $17.5 Bn, helping net debt fall from $52.6 Bn in Q1 to $41.8 Bn and gearing decline to 18.7%.
The growth story is becoming broader. Integrated Gas, Upstream and Chemicals & Products all delivered stronger Adjusted Earnings sequentially, while the proposed ARC Resources acquisition adds another long term growth platform in Canada and increases Shell's expected Integrated Gas and Upstream production growth through 2030.
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