EQNR - Parsing European Supermajors: Shell Reigns Supreme

2025-04-11 14:43:29 ET

Summary

• Shell plc is the best risk-adjusted play among European supermajors due to its strong balance sheet, high credit quality, and natural gas-focused production mix.
• Shell and Equinor have the best credit ratings (Aa2) and lowest gearing, providing a cushion during market volatility.
• Shell's earnings sensitivity is lower than peers, thanks to its strategic pivot to natural gas, making it more resilient in fluctuating markets.
• Shell's disciplined capital returns strategy, including stable buybacks, ensures SHEL shareholder returns even in a challenging environment.

Investing and choosing the right plays in European Big Oil isn't always cut and dry. The supermajors all have vastly different business profiles with different gives and takes, but as the recent market rout has shown, when things hit the fan, selling is indiscriminate. Performance across the major names that I personally cover and have working models on – BP ( BP ), Shell plc ( SHEL ) (RYDAF), Eni ( E ), Total ( TTE ), Equinor ( EQNR ) – look oddly similar over the past few months....

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