Back to top

Analyst Blog

Integrated energy firm Royal Dutch Shell plc (RDS.A - Analyst Report) reported that it will not be going ahead with its previously proposed program to construct a gas-to-liquids (GTL) plant in Louisiana. Moreover, the company is planning to stop all activities related to the development.  

The Gulf Coast GTL project was expected to have a capacity of roughly 140,000 barrels of liquid fuel per day from natural gas feedstock. Moreover, the availability of gas is abundant in the locality. Despite these factors, the company felt that the North American project was not a feasible opportunity in the long run. Shell believes that the expected development expenses as well as uncertainty related to future oil and gas prices pose a potential threat when considerations of profit are taken into account.   

Management reveals that the recent decision reflects the company’s plan to allocate capital to more profitable projects worldwide, with a view to increase shareholder value.   

U.K.-based Shell is the largest oil company in Europe. Moreover, the company has operations worldwide and is involved in various activities related to oil and natural gas, chemicals, power generation, renewable energy resources, and other energy related businesses.

However, Shell’s relatively heavy downstream exposure leaves it less diversified than its integrated peers. As such, the company’s results remain greatly exposed to refining/marketing margins. Shell’s downstream operations have struggled recently due to weak demand for fuel, leading to lower returns in this segment.  

Royal Dutch Shell currently holds a Zacks Rank #4 (Sell), implying that it is expected to underperform the broader U.S. equity market over the next one to three months.

Meanwhile one can consider better-ranked energy players like Matador Resources (MTDR - Snapshot Report), SM Energy Company (SM - Analyst Report) and Tesco Corporation (TESO - Snapshot Report) that offer value. All the stocks sport a Zacks Rank #1 (Strong Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.68 +3.66%
WEATHERFORD… WFT 23.75 +3.58%
BANCO DO BR… BDORY 14.42 +3.37%
AIR INDUSTR… AIRI 9.89 +3.13%
EQT MIDSTRE… EQM 97.88 +3.11%