Image source: Getty Images
It may be tragic but Shell (LSE: SHEL) shares spiked when Donald Trump bombed Iran and the oil price surged towards $78 a barrel. With crude now back near $68, the heat’s gone out of the stock. It’s down 8% over the last 12 months. But long-term investors won’t be too bothered. Over five years it’s still doubled, with dividends on top.
It also looks relatively cheap, with a price-to-earnings ratio of 9.85. That’s comfortably below the long-run FTSE 100 average of around 15. A bargain? That depends on what happens next.
Earnings bounce back
On 2 May, Shell posted a 28% drop in first-quarter net profit to $5.58bn, amid falling oil prices and lower refining margins. However, it did hold the pace of its share buyback programme, something FTSE 100 rival BP hasn’t managed.
Adjusted earnings, its definition of net profit, jumped 51% to $5.6bn, beating forecasts of…
