Shell shares smash record after results surprises

Employee at Shell forecourt. Credit: Shell.

A record price of £41 today rewarded “Never sell Shell” investors as the oil giant ramped up its sector-leading returns with plans for the second-highest share buyback in its history.

Shell (LSE:SHEL), which has repurchased 26% of its shares over the last four years, accompanied the bigger-than-expected quarterly $5 billion (£3.8 billion) buyback with a 9% year-on-year dividend increase.

• Invest with ii: SIPP Account | Stocks & Shares ISA | See all Investment Accounts

Shares broke new ground above 4,000p last week and made further progress today as energy prices and a record refining margin led to the second-largest profit in the company’s history.

This morning’s peak of 4,110p compared with less than 1,000p in 2020, when the company’s first dividend cut since the Second World War dealt a blow to the old “Never sell Shell” stock market adage.

Shares had recovered to 2,180p by 2022’s second-quarter results presentation as higher prices and margins caused by the Russia-Ukraine war fuelled all-time high earnings of $11.5 billion and a $6 billion quarterly share buyback programme.

Today’s results showed third-quarter adjusted earnings had doubled over a year ago to a forecast-beating $10.8 billion, boosted by a refining margin of $42 that compared with $24 in the previous quarter and $11.50 a year ago.

The surge in earnings came even as the impact of the Middle East war meant total oil and gas production for the first nine months of the year decreased by 17% against 2025.

Cash flow from operations (CFFO) excluding working capital jumped to $21.7 billion in the quarter, enabling net debt to fall by $6 billion since the end of last year.

• Autumn Budget 2026: what it means for your money
• The two stocks paying biggest FTSE 100 dividends in November
• Lloyds Bank Q3 results: big profits but guidance static

This is despite September’s completion of the acquisition of Canada’s ARC Resources, which added some $6 billion to the net debt position.

Chief financial officer Sinead Gorman said that the company’s policy of through-the-cycle shareholder distributions of 40-50% of CFFO remained “sacrosanct” as she announced the 20th consecutive quarter of buybacks worth $3 billion or more.

Fewer shares in issue benefit the key metric of earnings per share and give investors a higher proportional stake in the company and future dividend distributions.

Gorman added: “Our progressive dividend remains one of our key financial priorities, as can be seen by the 9% increase in our dividend per share over the last 12 months.”

The latest award of 39.06 US cents a share, which is unchanged on the previous quarter, is due for distribution on 21 December. The ex-dividend date is 12 November, with the converted sterling figure due to be announced on 7 December.

According to Shell data reported by Reuters, total shareholder return when including reinvested dividends stood at a peer-leading 120% in the period since the start of 2023. This compared with BP (LSE:BP.) at 78%, TotalEnergies SE (EURONEXT:TTE) at 84%, ExxonMobil Holdings Corp (NYSE:XOM) at 89% and Chevron Corp (NYSE:CVX) with 51%.

• FTSE 100 ex-dividend dates: November 2026
• Sign up to our free newsletter for investment ideas, latest news and award-winning analysis
• A compelling reason to own undervalued UK shares

Morgan Stanley, which had an Overweight position on the shares ahead of these results, noted that today’s earnings figure came in 5% ahead of the City consensus. CFFO was 19% ahead.

The focus now turns to Shell’s next capital markets event, which is due to take place on the same day as fourth-quarter results on 4 February.

At the last strategy update in March 2025, chief executive Wael Sawan enhanced shareholder distributions from 30-40% to 40-50% of cash flow.

He also increased the structural cost reduction target from $2-3 billion by the end of 2025 to a cumulative $5-7 billion by the end of 2028, compared to 2022.

Sawan said today that Shell’s “relentless focus” on operational performance had “enabled very strong results in a quarter with continued severe disruption to the global energy system”.

He added that investment in Shell’s Integrated Gas business, including the ARC deal and a decision to expand liquefaction capacity at a joint venture facility in Canada, supported Shell’s long-term cash flow growth outlook.