RBC Capital Markets downgraded Shell PLC to ‘Sector Perform’ ahead of its Q4 results, citing concerns over deteriorating portfolio depth and softer operational output. In a note released Tuesday, RBC analysts pointed to Shell’s January trading update, which highlighted a 5% year-over-year decline in upstream production volumes and subdued performance in the oil trading division. While refining margins improved by 12% sequentially, RBC concluded that the benefit would only partially offset the upstream headwinds, prompting the more cautious outlook.

Analysts surveyed by Zacks Investment Research expect Shell’s adjusted earnings per barrel of oil equivalent (BOE) to range between $12.50 and $14.00 for the December quarter, compared with $13.20 in Q3. Projections for downstream throughput stand at 3.1 million barrels per day (mbpd), up from 3.0 mbpd in the prior quarter, while chem­icals segment margins are forecast to contract by roughly 4% sequentially due to seasonal maintenance. Investors will also watch working capital movements, with consensus estimating a $1.2 billion build in inventory, which may pressure free cash flow conversion rates.

Shell CEO Wael Sawan emphasized on Monday that the liquefied natural gas (LNG) sector is growing at approximately 3% per annum, outpacing the broader gas market. Speaking at an industry conference, Sawan noted that Shell’s LNG portfolio delivered 9.8 million tonnes of cargo in Q3 2025, up 2.5% year-over-year, and reiterated plans to bring 5 million tonnes per annum of new LNG capacity online by the end of 2026. He signaled that these targeted expansions, combined with long-term offtake agreements, should underpin Shell’s medium-term earnings stability despite near-term upstream volatility.