**Shell** “Is Shell on the Verge of Closing Valuation Gap with Exxon? CEO Hints at NYSE Listing to Boost Stock Value”

Houston, Texas – Shell plc, a major player in the oil and gas industry, is considering a strategic move to close the valuation gap with American peers like Exxon Mobil Corporation. CEO Wael Sawan hinted at a potential New York listing by mid-2025 if the valuation discrepancy persists. While Sawan’s focus on the valuation gap is valid, the issue goes beyond the London listing, with Shell’s heavy investments in renewables potentially impacting its valuation against U.S. counterparts.

Shell’s emphasis on renewable energy, despite scaling back its ambitious green energy goals, has contributed to its discounted valuation compared to Exxon and Chevron. The European major’s valuation multiples trail behind its U.S. peers, with Shell’s forward P/E at a 40% discount to Exxon. Addressing this gap may require a significant market cap increase for Shell.

Moreover, Shell’s higher dividend yield suggests a broader discount, pointing to possible challenges in achieving parity with its American counterparts. The company’s focus on renewables, evident in its 2023 commitment to a significant portion of capex allocated to renewable energy projects, shapes its investment strategy distinctively from Chevron and other U.S. oil majors.

Despite initiatives to boost returns and profitability, Shell’s greater emphasis on renewables poses challenges in attracting capital on par with U.S. peers. The European major’s capital allocation decisively leans towards renewable energy segments, a trend reflected in its valuation disparity vis-a-vis American counterparts.

While a potential NYSE listing could enhance liquidity and accessibility to American capital, it may not resolve the fundamental issue of valuation discrepancy rooted in differing capital allocation strategies. The focus on addressing the valuation gap signals a strategic shift in Shell’s approach, aiming to align its capital allocation with market expectations and investor sentiment.

In conclusion, Shell’s valuation gap compared to U.S. oil majors stems from its distinct capital allocation choices and renewable energy focus. While a NYSE listing may offer some advantages in terms of liquidity, the core challenge lies in reshaping the company’s capital allocation strategy to bridge the valuation gap effectively. Management’s proactive stance on addressing this issue reflects a commitment to realigning Shell’s strategic priorities with market dynamics.