Shell PLC: 2Q TS above our baseline

Research evidence excerpt

Shell PLC: 2Q TS above our baseline

C A Z E N O V E Europe Equity Research

07 July 2026

Shell PLC Overweight

SHEL.L, SHEL LN

2Q TS above our baseline Price (06 Jul 26):2,913p

Price Target (Jun-27):3,600p

Our take on 2Q - Strong. Key trading statement inputs screen ahead of the European Oil & Gas

ACbaseline profiled in last week’s Tactical Views report which forecast 2Q at NI Matthew Lofting, CFA

$7.2bn and CFFO pre-WC $14.6bn. In particular; 1) Operational performance (44-20) 7134-6301

screens strongly. Volume ranges are above prior guidance across businesses matthew.lofting@jpmorgan.com

indicating the non-Middle East asset base has performed well and mitigated a Tianyu Wu

portion of the Hormuz closure effect; 2) Trading has performed well across both (44-20) 3493-1281

gas/LNG and liquids. The latter has held in-line q/q with what was a strong 1Q, vs. tianyu.wu@jpmorgan.com

J.P. Morgan Securities plc

JPMe having allowed for a 1SD step down owing to a higher geopolitical element

to 2Q price volatility; 3) Chems inflection. The absence of ‘loss-making’ Specialist Sales contact details:

commentary this quarter should be welcomed; 4) At the mid-point, cashflows are

Ian Mitchell - Specialist Sales -

guided to benefit from ~$5bn WC/derivative inflows. This represents a ~40% European Energy

reversal of total 1Q build effects which, combined with points 1 and 2, should drive (44-20) 7134-1356

balance sheet deleveraging. Good underlying performance should support capture ian.e.mitchell@jpmorgan.com

of high absolute prices and be well received; we expect the shares to trade higher

versus a valuation baseline of 11%+ FCF yield at forward strip oil prices.

• Noteworthy Areas: 1) Trading and optimisation; IG significantly higher

q/q, Downstream in line q/q.