Is SHEL's Q3 2024 EPS surge a sign of long-term growth?


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Shell's Q3 2024 EPS surge is not a definitive sign of long-term growth, and here's why:
- Q3 2024 EPS Context: Shell's Q3 2024 EPS is reported at $0.681, which is a key figure for assessing the company's profitability. However, this figure needs to be evaluated in the context of the broader economic and industry conditions.
SHEL Diluted EPS YoY, Diluted EPS
- Q2 Performance and Challenges: In Q2 2024, Shell reported an EPS of $0.99, which missed analyst estimates by $0.7923. This indicates that while Q3 EPS may appear strong relative to Q2, it is still below historical or industry averages, suggesting that Q3 performance is not necessarily indicative of long-term growth.
- Revenue and Capital Expenditure Outlook: Shell has initiated a $3.5 billion share buyback program for Q3, which is a positive signal for short-term stock price appreciation but does not directly correlate with long-term growth24. Additionally, the company's capital expenditure outlook for 2024 remains cautious, with a range of $22-$25 billion, which does not suggest a strong commitment to long-term expansion.
- Operational and Strategic Factors: While Shell has made progress in reducing operating expenses and has announced share buybacks, the company also faces challenges such as the impact of lower natural gas prices and higher feedstock costs on the Nature Energy acquisition4. These factors can offset gains in other areas, making it difficult to draw a clear conclusion about long-term growth.
- Industry and Market Conditions: The broader energy market conditions, including fluctuations in oil and gas prices, refining margins, and demand for gasoline, can significantly impact Shell's profitability and long-term growth prospects. Without considering these external factors, it is challenging to determine if the Q3 EPS surge is a sign of sustainable long-term growth.
In conclusion, while Shell's Q3 2024 EPS surge may be a positive indicator in the short term, it is crucial to consider the company's overall financial health, strategic initiatives, and the broader industry context to assess its long-term growth potential.
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SHEL EPS in Q3 2024
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