7 Undervalued European Stocks To Invest In Now

3. Shell (NYSE:SHEL) 

Number of Hedge Fund Investors: 49

Forward P/E Ratio as of September 26: 8.47

Shell (NYSE:SHEL) is a British multinational oil and gas company and one of the largest energy companies in the world. The company is involved in every aspect oil and gas business. Shell is transitioning towards cleaner energy sources, investing heavily in renewable energy and electric vehicle infrastructure. Recently, Shell  (NYSE:SHEL) has undergone significant changes; the company has paused less profitable biofuel projects and is focusing on hydrocarbons, including investing in oil and gas developments and LNG terminals.

On August 12, Shell (NYSE:SHEL) announced to invest in the development of Phase 2 of the Surat Gas Project in Australia, through its incorporated joint venture, Arrow Energy. As a 50% joint venture partner with PetroChina. Phase 2 is expected to contribute around 22,400 barrels of oil equivalent per day at peak production. The project will supply gas to the Shell-operated QCLNG liquefied natural gas (LNG) facility to meet long-term contracts and supply domestic customers.

The project will develop 450 production wells, a field compression station, 27 kilometers of new pipeline, and road and infrastructure upgrades. The first gas is expected in 2026. By investing in Phase 2 of the Surat Gas Project, Shell (NYSE:SHEL) aims to sustain and grow its secure energy source by offering a lower-emissions alternative to options like coal.

The company’s focus on investing in oil and gas developments and LNG terminals is expected to drive growth in the company’s production. The company’s total production across segments is expected to grow by an additional 250Mboe/d through 2025, driven by the online of additional gas fields and offshore rigs in the Gulf of Mexico and Brazil.

Shell (NYSE:SHEL) is trading 8.47 times its earnings, which is a 27.16% discount compared to the sector median of 11.63. The stock was held by 49 hedge funds at the end of the second quarter with stakes worth $6,05 billion. As of June 30, Fisher Asset Management is the largest shareholder in the company, with a stake worth $1.73 billion. Analysts hold a consensus Buy rating on the stock, and the average price target of $83.30 implies an upside of 20.19%.