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


Shell Oil (RDS.A) closed at $60.96 in the latest trading session, marking a +1.16% move from the prior day. This change outpaced the S&P 500′s 0.48% gain on the day. Meanwhile, the Dow gained 0.53%, and the Nasdaq, a tech-heavy index, added 0.8%.

Coming into today, shares of the oil and gas company had gained 3.03% in the past month. In that same time, the Oils-Energy sector lost 1.26%, while the S&P 500 lost 2.09%.

Investors will be hoping for strength from RDS.A as it approaches its next earnings release, which is expected to be January 31, 2019. The company is expected to report EPS of $1.48, up 42.31% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $101.78 billion, up 19.15% from the prior-year quarter.

Any recent changes to analyst estimates for RDS.A should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 8.13% lower within the past month. RDS.A is holding a Zacks Rank of #4 (Sell) right now.

Digging into valuation, RDS.A currently has a Forward P/E ratio of 10.85. Its industry sports an average Forward P/E of 9.89, so we one might conclude that RDS.A is trading at a premium comparatively.

Investors should also note that RDS.A has a PEG ratio of 1.3 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. The Oil and Gas – Integrated – International industry currently had an average PEG ratio of 1.07 as of yesterday’s close.

The Oil and Gas – Integrated – International industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 248, which puts it in the bottom 4% 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.

To follow RDS.A in the coming trading sessions, be sure to utilize Zacks.com.

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