Bridgewater Significantly Boosted Its Stake in SHEL Stock in Q2. How Investors Should View the Move.

Crude oil has swung sharply in 2026. Brent crude fell nearly 40%, dropping from its year-to-date (YTD) high of $118.35 on March 31 to $71.44 by July 1 after a U.S.-Iran peace deal reopened the Strait of Hormuz.

But the ceasefire collapsed on July 8, lifting Brent more than 16% from its July low and making energy the best-performing S&P 500 Index ($SPX) sector over that period. Shell plc (SHEL) handled the volatility well. 

In early July, the company said it expected “significantly higher” oil and LNG trading results in Q2. Ahead of its July 30 earnings report, Technical Opinion moved from 40% “Sell” to 72% “Buy” in one month, while analysts expected EPS to more than double from a year earlier.

Then came the hedge-fund filing. Bridgewater Associates, the fund founded by Ray Dalio, raised its Shell plc (SHEL) stake to 1.53 million shares from 312,200 in Q2, a roughly 390% increase. It also added to Pacific Gas & Electric Company (PCG) and reduced its position in Amazon.com (AMZN).

So, what made Shell plc worth nearly quintupling in Bridgewater’s portfolio? 

The Numbers Behind Shell’s Appeal

Shell makes money from oil and gas production, LNG, fuel sales, refining, chemicals, and trading. The stock has performed well, rising 29.84% over the past 52 weeks and 26.25% so far this year.

Despite that run, SHEL still trades at 8.84 times forward price-to-earnings, below the sector average of 12.89 times. It also pays a $0.781 quarterly dividend, most recently paid on Aug. 14, for an annualized yield of 3.28%. Its 33.07% forward payout ratio and two straight years of dividend increases leave room for buybacks and investment in the business.

The company’s Q2 numbers were strong. Adjusted earnings rose to $9.8 billion from $6.9 billion in Q1, while adjusted EBITDA climbed to $20.7 billion from $17.7 billion. Income attributable to shareholders came in at $10.8 billion. Operating cash flow jumped to $21.4 billion from $6.1 billion, helped by a $3.4 billion working-capital inflow after an $11.2 billion outflow in Q1. 

With cash capex unchanged at $4.2 billion, free cash flow rose to $17.5 billion from $2.9 billion. Shell plc cut net debt to $41.8 billion from $52.6 billion and reported gearing of 19%. It also announced $3 billion in new buybacks, plus $1.2 billion carried over, marking its 19th straight quarter with at least $3 billion in share repurchases.

The Fundamentals Supporting the Boost

Shell plc has agreed to buy ARC Resources (AETUF), giving it a bigger position in the Montney Formation shale basin in British Columbia and Alberta. The deal values ARC Resources at about $13.6 billion, including roughly $3.4 billion in cash and about 228 million Shell plc shares. ARC Resources shareholders approved the deal with 99.54% of votes, and it is expected to close in Q3 2026 after the final Investment Canada Act review. 

Shell plc sees Canada as a lower-cost base for its business, with Montney gas potentially supplying its 40% stake in LNG Canada. An LNG Canada expansion is still being considered and has not yet reached a final investment decision.

At the same time, Shell plc is selling assets that no longer fit its main focus. It agreed to sell India’s Sprng Energy renewables business for $1.8 billion; its 50% non-operated stakes in the Na Kika platform and Coulomb tieback in the Gulf of Mexico for $1.7 billion; Jiffy Lube International and Premium Velocity Auto for $1.3 billion; and BG Cyprus, which owns a 35% stake in the Aphrodite gas field, for up to $720 million. It also agreed with TotalEnergies SE (TTE) to sell its European onshore renewables portfolio in Italy, the Netherlands, Spain, and the UK.

Shell plc expects global LNG demand to rise about 65% by 2050. It has LNG projects under construction in Qatar, Nigeria, Australia, and Trinidad and Tobago, with start-ups expected from 2026. The company also agreed to supply and trade 0.5 billion to 1.0 billion cubic meters of LNG a year to Metlen Energy & Metals (MTLN.LN) from 2027 through 2031. In Nigeria, Shell plc plans to invest another $20 billion in the proposed Bonga South West project after putting about $7 billion into the country since 2023.

Analyst Views and the Road Ahead

Shell plc is set to report Q3 results on Oct. 29. Analysts expect $2.72 in earnings per share for the September quarter, up 46.24% from $1.86 a year earlier. For all of 2026, they expect $10.36 per share, up 64.44% from $6.30 in 2025.

Several analysts have raised their targets. Scotiabank’s Betty Zhang kept a “Sector Outperform” rating and lifted her target to $122 from $91. Jefferies’ Mark Wilson maintained a “Buy” rating and raised his target to $122.40 from $119.70. Wells Fargo’s Sam Margolin took a more cautious view after Shell plc’s Q2 results. On July 31, he kept an "Equal-Weight" rating but raised his target to $105 from $100.

Overall, 25 analysts rate Shell plc a consensus “Moderate Buy”. The average target price is $99.23, which suggests about 7% upside from current price levels.

Conclusion

Bridgewater’s sharp increase in SHEL looks understandable, not blindly imitable. Shell combines a still-reasonable valuation with a solid dividend, large-scale buybacks, sharply improved free cash flow, and a balance sheet that strengthened materially in Q2. Its ARC acquisition and asset-sales program also point toward a more concentrated, gas- and LNG-led portfolio, which could support cash generation beyond near-term oil-price swings. With the shares already up significantly, investors should expect volatility, particularly if crude prices retreat. Still, the most likely direction appears modestly higher over the next several quarters if Shell executes on ARC, sustains LNG and trading strength, and continues returning cash to shareholders.