Will Shell (SHEL) Earnings Top Expectations Again in Q2?

Zacks Equity Research Published on July 22, 2022

Shell plc (SHEL - Free Report) is set to release second-quarter results on Jul 28. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $2.91 per share.

Let’s delve into the factors that might have influenced the integrated energy behemoth’s results in the June quarter. But it’s worth taking a look at SHEL’s previous-quarter performance first.

Highlights of Q1 Earnings & Surprise History

In the last-reported quarter, Europe’s largest oil company beat the consensus mark on higher commodity prices. SHEL had reported earnings per ADS (on a current cost of supplies basis, excluding items — the market’s preferred measure) — of $2.38, above the Zacks Consensus Estimate of $2.12.

Shell beat the Zacks Consensus Estimate for earnings thrice in the last four quarters and missed in the other, resulting in an earnings surprise of 3.4%, on average. This is depicted in the graph below:

What Does Our Model Say?

The proven Zacks model does not conclusively show that Shell is likely to beat estimates in the second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: SHEL has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $2.91 per share each. Investors should know that the Zacks Consensus Estimate for the second-quarter bottom line has been revised 3.6% downward in the past seven days.

Zacks Rank: Shell currently carries a Zacks Rank #1, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult this earnings season.

Stocks to Consider

While an earnings beat looks uncertain for SHEL, here are some firms from the energy space that you may want to consider on the basis of our model:

Range Resources Corporation (RRC - Free Report) has an Earnings ESP of +9.47% and a Zacks Rank #1. The firm is scheduled to release earnings on Jul 25.

You can see the complete list of today’s Zacks #1 Rank stocks here.

RRC is valued at around $8.2 billion. The Zacks Consensus Estimate for the company’s 2022 earnings has been revised 11% upward over the past 60 days. Range Resources has surged around 95.5% in a year.

Liberty Energy Inc. (LBRT - Free Report) has an Earnings ESP of +26.82% and a Zacks Rank #2. The firm is scheduled to release earnings on Jul 25.

For 2022, LBRT has a projected earnings growth rate of 168.6%. Valued at around $2.4 billion, Liberty Energy has lost around 1.7% in a year.

ExxonMobil (XOM - Free Report) has an Earnings ESP of +8.94% and a Zacks Rank #2. The firm is scheduled to release earnings on Jul 29.

XOM topped the Zacks Consensus Estimate by an average of 1.3% in the trailing four quarters, though it experienced an 8% miss in Q1. ExxonMobil has gained some 51.9% in a year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Zacks Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.

This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.