In arguing for a break-up of Shell, Dan Loeb, the activist investor and chief executive of Third Point, the hedge fund, hasn’t told shareholders in the oil company anything they didn’t already know. The competing demands on cashflows from renewables investment and shareholder returns mean that investors have refused to award the stock much credit, despite booming commodities prices.
A forward enterprise value of 4.3 times earnings before tax and other charges is above the lows of the commodities rout of around 2015, but is below the average market valuation in the years since. That’s a discount to oil and gas pure plays such as Chevron or ExxonMobil, while all three are dwarfed by the price tags attached to renewable energy groups like Orsted,
