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Royal Dutch Shell stock is trading at $54.36 per share, up 0.44% or $0.23. The company’s market capitalization is $254.13 billion. For the year to date, this stock has turned in a mixed performance. From Q4 2015 through Q4 2016, RDS has generated a mix of positive and negative earnings surprises. The price/earnings ratio is rather inflated at 51.40, and the earnings-per-share is listed as $1.06. The 1-year target estimate price is approximately $6 higher than the prevailing price, at $60.96 per share. What is particularly noteworthy about this company is the declining revenues since 2013. At that point, $451.24 billion was generated, followed by revenues of $421.11 billion in 2014. In 2015, this figure plunged to $264.96 billion. During that 3-year period, earnings have consistently decreased. In 2013, earnings of $16.37 billion were generated, followed by $14.87 billion in 2014 and $1.94 billion in 2015. Naturally, the oil price slump has severely affected the profitability and revenue streams of companies like Royal Dutch Shell.
How Do Analysts View Royal Dutch Shell Stock?
On a rating scale of 1.0 (strong buy) to 5.0 (sell), the stock is regarded as a strong buy at 1.7. The financials of Royal Dutch Shell paint an interesting picture. The total assets on the balance sheet have decreased between 2012 and 2015. The total liabilities of the company have increased in that same period. The total equity has decreased. Consider the following graphic:
| Year | 2012 | 2013 | 2014 | 2015 |
| Total Equity | $174.75 billion | $180.05 billion | $171.97 billion | $162.88 billion |
| Total Liabilities | $175.55 billion | $177.47 billion | $181.15 billion | $177.28 billion |
| Total Assets | $350.29 billion | $357.51 billion | $353.12 billion | $340.16 billion |
The company’s income statement between 2012 and 2015 has also shown dramatic declines in total net income. In 2012, that figure was $26.71 billion and by 2015 total net income had been whittled away to just $1.94 billion. A positive turnaround has been in play since 2014, and it comes from cash from financing activities. In 2014, that figure was $-12.79 billion and by the end of 2015 it was $3.81 billion. Cash from investing activities and from operations has been declining in that same 2-year period.
How is Royal Dutch Shell’s Asset Disposal Programme Performing?
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Royal Dutch Shell is in the process of sealing a deal on the sale of its Gabon and North Sea assets. The company has vowed to make good on its asset disposal program, with sales of $30 billion expected over time. Recently, Royal Dutch Shell announced that it had divested from its Japanese refining operation known as Showa Shell, valued at $1.4 billion. In total, this seals some $5 billion of divestments for the company. The challenge for Royal Dutch Shell remains its production assets and upstream exploration initiatives.
The company has ambitious plans to divest some $30 billion worth of assets within two years, so that its $35 billion debts vis-à-vis BG Group can be financed. By the end of Q3 2016, just $1.7 billion had been divested with agreements in place for an additional $3.3 billion. Since oil prices were trading in the $20 – $30 per barrel range for the early part of 2016, divesting was an expensive business. Now, these asset cells are looking increasingly more attractive. Just recently, Shell sold Viva Energy Australia for a tidy sum of $250 million.
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