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Shell Oil (RDS.A) Outpaces Stock Market Gains: What You Should Know

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Shell Oil (RDS.A - Free Report) closed at $57.29 in the latest trading session, marking a +1.42% move from the prior day. This change outpaced the S&P 500's 0.91% gain on the day. Elsewhere, the Dow gained 1.22%, while the tech-heavy Nasdaq added 1%.

Coming into today, shares of the oil and gas company had lost 6.43% in the past month. In that same time, the Oils-Energy sector lost 4.55%, while the S&P 500 gained 1.65%.

Wall Street will be looking for positivity from RDS.A as it approaches its next earnings report date. This is expected to be January 30, 2020. In that report, analysts expect RDS.A to post earnings of $1.08 per share. This would mark a year-over-year decline of 21.17%.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.39 per share and revenue of $323.32 billion. These totals would mark changes of -14.92% and -18.18%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for RDS.A. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.11% higher within the past month. RDS.A is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note RDS.A's current valuation metrics, including its Forward P/E ratio of 12.87. For comparison, its industry has an average Forward P/E of 12.73, which means RDS.A is trading at a premium to the group.

Meanwhile, RDS.A's PEG ratio is currently 2.57. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Oil and Gas - Integrated - International was holding an average PEG ratio of 1.81 at yesterday's closing price.

The Oil and Gas - Integrated - International industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 81, putting it in the top 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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