Greggs (LSE: GRG) shares have been a big winner in recent years, as the board pursued an ambitious and successful expansion strategy. 

The bakery chain has become a fixture on our high streets, in shopping centres, railway stations and even airports. As Britons seek affordable treats in tough times, Greggs has filled its boots.

Then last autumn, growth slowed as the wider economy ground to a halt. Although sales are still rising, the pace has slowed. The company set itself a high benchmark and has struggled to meet it.

Can this FTSE 250 stock bite back?

In full-year results released on 9 January, Greggs announced that total sales had passed £2bn for the first time in 2024, rising 11.3% year on year. 

That should have been cause for celebration but like-for-like (LFL) sales growth in company-managed shops had slowed to 5.5%.

Q4 was weaker, with total sales up 7.7%, but LFL sales growth slipping to just 2.5%, amid “more subdued high street footfall”. 

Chief executive Roisin Currie remained optimistic, citing a strong pipeline of new locations and an expanding menu, but these are tough times if consumers can’t afford a Greggs steak bake or sausage roll.

Even the weather has been against it as hopes for a 2025 turnaround were cooled by a disappointing trading update on 9 March. 

LFL sales in company-run shops rose just 1.7% in the first nine weeks of the year, with “challenging” January weather the culprit this time. There was a sign of improvement in February, and with spring on its way, investors will hope that continues.

While Greggs won’t be hit by Donald Trump’s trade tariffs, it could take a knock from the resultant gloom. Plus inflation is expected to climb this summer rather than fall. Greggs will also take a double cost hit from rising employer’s National Insurance and the 6.7% minimum wage hike, which both land in April.

The board is battling on, expanding its store footprint and extending trading hours, while investing in home delivery services too.

I’ve been following the shares for a while, but thought expectations were too high and the shares were too pricey. That’s not the case today.

Valuation down, dividend up

The Greggs share price has fallen 35% over the past year. As a result, its price-to-earnings (P/E) ratio has dropped from over 22 times to a far tastier 12 times.

Another positive is the higher dividend yield, which has crept up to 3.35%. I think Greggs is worth considering today.

The 12 analysts offering one-year share price targets for the stock have a median estimate of 2,344p, suggesting a potential 26% rise from today’s levels. Combined with the improved yield, this could deliver a total return of nearly 30%. But I’ll add a note of caution.

The sell-off may not be over yet. Someone who invested £10,000 a month ago would have seen their stake shrink by 13.5%, leaving them with just £8,650 today. That’s a £1,350 paper loss.

Greggs has got my juices flowing but there’s a risk that the days of unstoppable growth might be over for now.

The Phoenix Group Holdings (LSE: PHNX) share price has jumped 7.54% as I write this morning (17 March), and I couldn’t be happier. 

I bought the stock 18 months ago, and while I’ve enjoyed handsome dividends since then, share price growth had been elusive. Until today.

Phoenix shares are suddenly flying and for me, this underscores the appeal of buying high-yield FTSE 100 dividend stocks when they’re out of favour. 

Not only do I receive a substantial income but there’s also potential for share price recovery.

A strong set of FTSE 100 results

Phoenix Group’s 2024 full-year results have impressed investors, as reflected in today’s share price surge. Operating cash generation rose 22% to £1.4bn, two years ahead of its 2026 target. Group CEO Andy Briggs said this was “driven by increased surplus from our growing businesses and strong delivery of recurring management actions”.

Total cash generation did fall 12% from £2.02bn to £1.78bn, but still exceeded the top end of the board’s 2024 target range of between £1.4bn and £1.5bn.

Group IFRS adjusted operating profit jumped 31% “supported by particularly strong growth in our capital-light Pensions and Savings business”, Briggs said.

The balance sheet remains resilient, with a £3.5bn Solvency II surplus, although again, that’s down from £3.9bn in 2023. The board says that “supports our progressive and sustainable dividend policy”.

Shareholder Capital Coverage Ratio of 172% is down slightly from 176% in 2023 but remains comfortably in the top-half of its operating range of 140% to 180%.

For income-focused investors like myself, the dividend is a critical factor. Phoenix has recommended a final 2024 dividend of 27.35p, up 2.6%.

While that isn’t a massive hike, it’s hard to complain, given just how much income I’m getting.

Following this morning’s surge, the trailing dividend yield has dipped slightly from 10.3% to 9.4%. I can live with that. It’s still the highest on the blue-chip index.

I don’t expect too much share price growth

The prospect of falling interest rates could enhance the appeal of dividend stocks like Phoenix. As yields on rival asset classes such as cash and bonds decline, higher-yielding FTSE 100 equities should look even more enticing.

Let’s not get too carried away. While today’s price jump is encouraging, those considering investing must first beware the impact of any short-term profit-taking. The shares are already retreating from this morning’s high.

The 14 analysts offering one-year share price forecasts have produced a median target of 574.5p, suggesting an increase of just 2% from today’s price. These figures were compiled before today’s results, and brokers may take a more optimistic view now, of course. But nobody is expecting Phoenix shares to shoot the lights out. Including me.

Even after this morning’s jump, they’re still up just 3.5% over one year. They’re down 10% over five.

This is a bumpy time for the global economy, and this could hit the value of assets under management. That won’t be reflected in today’s results, but will pop up in the next set of numbers. The market response could be very different then.

Also, Phoenix isn’t as cheap as it was, with the price-to-earnings ratio now climbing above 21. While I’m thrilled by today’s share price bump, I still see this as a vehicle for income, rather than growth. And I’m certainly getting that.

The Barclays (LSE:BARC) share price has outperformed many of its FTSE 100 peers over the past 12 months. It’s up 63% in that time. This rally reflects a mix of strategic execution, macroeconomic support, and investor optimism around CEO CS Venkatakrishnan’s restructuring plan. However, recent volatility — including a 5% drop post-earnings in February 2025 — highlights lingering risks tied to economic uncertainty and shifting market sentiment.

Strategic shifts and rebalancing 

The bank’s turnaround hinges on its risk-weighted asset (RWA) reallocation strategy, announced in early 2024. Barclays aims to shift £30bn of capital from its historically dominant investment banking division to higher-returning consumer and corporate banking segments.

This includes expanding its UK retail footprint through the acquisition of Tesco Bank. The acquisition contributed a £600m one-time gain and boosted 2024 pre-tax profits by 25%. By 2026, the investment bank’s share of RWAs will be capped at 50%. This is down from 63% in 2023, with a focus on improving returns.

While it’s too early to say the plan is working, 2024 was a good year when pre-tax profit jumped 24% to £8.1bn. It was driven by more than 7% income growth in investment banking and +9% growth in retail banking revenue.

Management targets a return on tangible equity (RoTE) of 12% by 2026. That’s up from 10.5% in 2024, supported by cost-cutting initiatives that reduced the cost-to-income ratio to 62%.

Shareholder returns and market sentiment 

Investors have been rewarded with a £1bn buyback and a 5% dividend hike. This is part of a broader pledge to return £10bn in capital by 2026. These moves, alongside improving UK economic indicators (modest growth, falling inflation), have buoyed sentiment.

However, the stock’s recent pullback reflects caution. Despite beating 2024 earnings estimates, Barclays’ 2025 guidance — including an 11% RoTE target and £7.4bn UK net interest income forecast — failed to excite a market priced for upgrades.

Macroeconomic risks and volatility 

Barclays’ exposure to global markets through its investing arm, and retail banking, makes it sensitive to macroeconomic shifts. The bank recently revised its US GDP growth forecast for 2025 to 0.7% from 1.5%, citing trade policy risks and softer labour markets. It now expects two US interest rate cuts in 2025 (June and September), up from one, which could pressure investment banking revenues. Meanwhile, UK mortgage demand — boosted by rate cuts —offers a partial offset, though structural hedges (£4.2bn income in 2024) and margin pressures complicate the picture.

The bottom line

While Barclays’ strategic pivot and capital returns justify much of its rally, execution risks remain. The RWA rebalancing must navigate cyclical pressures in consumer banking and potential US recession headwinds. The average share price target is now £3.44 indicating that the stock could be undervalued by 17%. However, the lowest share price target suggests that the stock is overvalued by as much as 23%. Yet it’s worth noting that there aren’t any Sell ratings on the stock.

While I’m broadly bullish on Barclays, recent appreciation has turned this stock into a large part of my portfolio. However, despite some concerns about concentration risk, I’ll consider buying more.

The International Consolidated Airlines (LSE:IAG) share price has been on a rampage over the last 12 months. The long-haul airline’s seen its valuation shoot up by almost 90%. And while there has been some unsurprising profit-taking in recent weeks, analyst forecasts predict more growth could be just around the corner.

So what’s behind these spectacular results? And could IAG shares fly even higher in 2025?

British Airways leads the charge

Ignoring one-time expenses, operating profits in 2024 surged by 26.7%, reaching €4.4bn, thanks to both higher passenger volumes and lower fuel costs. The group’s available seat kilometres – a proxy for capacity – came in 6.2% higher. However, zooming into the performance of British Airways, in particular, revealed some jaw-dropping gains.

Following the firm’s £7bn transformation programme, margins for British Airways landed at 14.2%, making rapid progress towards hitting management’s 15% medium-term target. Consequently, operating profits exploded from £1.34bn to £2.05bn – a 53% year-on-year jump.

Combined with respectable results from its other airlines, such as Iberia and Aer Lingus, IAG’s overall operating margins climbed from 11.9% to 13.8%. That puts the group firmly ahead of its European competitors such as Air France (4.7%) and Deutsche Lufthansa (4.1%).

Pairing all this with a €2.2bn jump in free cash flow, management was more than comfortable to announce a €1bn share buyback scheme just a few days prior to completing the previously launched €350m scheme in November.

Where can the stock go from here?

Given the strong financial performance and rise in demand for leisure travel, it’s not surprising to see investor sentiment surrounding IAG improve compared to a few years ago. However, it seems analysts don’t believe the growth story’s over.

The 17 institutional analysts following the business currently have an average 404.7p 12-month price target for IAG shares. That suggests shareholders could be about to reap another near-40% gain by this time next year.

However, while that’s undeniably exciting, forecasts need to be taken with a healthy pinch of salt. Not every analyst is as optimistic, with one predicting the stock could actually tumble to as low as 168.6p. And to be fair, there’s some room for pessimism.

While leisure travel demand’s rising rapidly, the same can’t be said for business travel. With the world adopting more online meeting solutions following the pandemic, management doesn’t expect business travel to recover to pre-pandemic levels.

Meanwhile, IAG’s aircraft fleet has an average age of 12.5 years, indicating the retirement of old aircraft and the purchase of new planes in the coming years. In fact, capital expenditures in 2025 are expected to rise from €2.8bn to €3.7bn. Subsequently, free cash flow‘s likely to come under pressure, especially if fuel prices start to rise again.

The bottom line

All things considered, I’m cautiously optimistic about IAG’s future performance. Management seems to have sucessfully navigated the nightmare of Covid-19 and delivered a leaner, more efficient enterprise in the process. I’m not looking for exposure to this sector, so this isn’t a stock I’m rushing to buy right now.

However, for investors who want to capitalise on the tailwinds of rising travel demand, IAG could be worth a closer look.

Despite a weak start to 2025 for the Glencore (LSE:GLEN) share price, the mining giant’s become the talk of the town. It seems management’s getting impatient with London investors undervaluing its business. As such, Glencore might be the latest company leaving the London Stock Exchange to relist elsewhere, most likely in New York.

But putting the potential departure aside, the group’s latest earnings reports seem to have failed to invigorate investor appetite. And to be fair, it was a bit of a mixed bag. However, digging deeper, there are some encouraging trends in the group’s underlying performance. With all this in mind, where could Glencore’s share price be 12 months from now?

Copper production to increase

Copper is a critical material in modern technologies, from renewable energy infrastructure to electric vehicles. As such, demand for the red metal is expected to rise considerably over the coming years. To capitalise on this trend, management’s aiming to expand its copper production to one million tonnes by 2028.

However, management’s been hesitant to pull the trigger until copper prices rise higher to make an increase in capacity worthwhile. In the words of CEO Gary Nagle: “We will wait until the market is ripe and ready”.

Nevertheless, the performance of its metal mining activities in 2024 was still fairly strong. Underlying earnings before interest and taxes (EBIT) came in at $2,375m – a 39% increase compared to 2023, thanks to higher prices and production volumes.

Sadly, this progress was adversely offset by far weaker coal production and prices. In fact, the group’s energy and steelmaking coal business saw underlying earnings shrink by 47% year-on-year to $908m. The end result was Glencore’s total adjusted EBIT falling by 7.5%, from $3.45bn to $3.19bn.

Is Glencore too cheap?

Seeing the Glencore share price tumble on the back of these latest results is understandable. However, when compared to its peers, there’s some evidence that Glencore shares are being underappreciated.

Looking at the underlying enterprise multiple, or Enterprise Value-to-EBITDA, the stock currently trades at around 4.9. By comparison, most of its rivals sit close to an underlying EV/EBITDA of 6.

Assuming the stock’s able to rise to the industry average, that implies a minimum 22% boost. And it would certainly help partially explain why the average analyst forecast currently expects Glencore’s share price to reach 447.09p by this time next year – a 40% increase.

Is this likely to happen? I remain sceptical. Mining’s a notoriously cyclical and risky enterprise. It’s possible that a rebound in coal, along with the continued increase in copper prices, could help Glencore’s earnings surge. But that’s dependent on supply and demand dynamics, which are difficult to anticipate.

And since the appetite for risk among British investors is seemingly quite weak, Glencore isn’t a stock I’m rushing to buy right now despite the optimistic outlook from institutional analysts.

Generating a second income from FTSE 100 shares is a great way to build financial security in retirement. Even better, using a Stocks and Shares ISA ensures that both the passive income and any capital growth from rising share values are tax-free for life.

Many don’t realise just how effective this strategy can be, so let’s crunch the numbers.

FTSE 100 dividends roll up over time

Aiming for a monthly second income of £499 means targeting an annual income of £5,988. The amount of capital required depends on the portfolio’s average dividend yield.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

While the FTSE 100 has an average yield of around 3.5%, I believe that a well-diversified portfolio of dividend-paying stocks could achieve a higher level of income than that. If targeting a 6% yield, an investor would need £99,800 to generate the desired target income.

That’s a big sum, but it can be built over time. An investor could hit the goal in 25 years by investing £125 a month in a spread of stocks with an average total return of 7% a year, roughly in line with the long-term FTSE 100 average. They’d do it in just 17 years by doubling their investment to £250 a month.

Land Securities Group looks decent value

One potential stock to consider for a dividend-focused ISA is Land Securities Group (LSE: LAND). As one of the UK’s largest commercial property developers and investors, it manages a diverse portfolio spanning office spaces, retail parks, and, more recently, residential properties.

The real estate investment trust (REIT) has faced headwinds from rising interest rates and the home working trend, which has hit demand for office space. Additionally, the growth of online shopping has impacted footfall at retail parks. These factors have weighed on the stock price, which is down 20% over five years and 10% in the last 12 months.

However, this downturn has pushed the stock to an attractive valuation, with a price-to-earnings ratio of just over 11. More importantly for income investors, the yield has now climbed to a hefty 7.07%.

This stock has a juicy 7% yield

While I don’t expect a major share price rebound to happen quickly given today’s uncertainties, the combination of a low entry price and high yield could make it appealing for long-term investors focused on income. The short term could be bumpy though.

When interest rates eventually ease and economic conditions improve, Land Securities could see stronger demand for its assets, potentially boosting its share price and securing those dividends. As with any stock, there are no guarantees.

Generating a £499 monthly second income through a Stocks and Shares ISA is achievable with a disciplined investment strategy. By focusing on dividend-paying stocks and reinvesting returns, investors can harness the power of compounding.

However, it’s crucial to diversify. While stocks like Land Securities offer high yields, they come with risks. A balanced portfolio with at least a dozen different stocks, and possibly a few more, can help manage volatility and reduce reliance on any single sector.

Over time, this approach should build a reliable second income stream. Just be prepared for some ups and downs along the way.

To say that housebuilder Persimmon‘s (LSE: PSN) share price has been in the doldrums for a while now is putting it mildly. In fact, it’s down 42% in five years. While I’ve been fortunate enough to invest during — rather than before — this downturn, I’m still to see any kind of real return.

So, why am I considering adding to my position? Let me explain.

Profit beat!

Like many holders, I welcomed last week’s full-year numbers from the York-based business with open arms. And this wasn’t just because they helped to distract my attention from the sell-off in the wider market.

CEO Dean Finch and co reported a 10% rise to annual underlying pre-tax profit to just over £395m in 2024. This comfortably beat the consensus among analysts of £380m.

What’s behind this good form? Well, it could be the result of inflation coming down to earth and mortgage rates becoming more attractive. The end to a temporary reduction in stamp duty likely prompted at least some buyers to get their skates on too.

The question, of course, is whether this marks a turning point for the Persimmon share price. No one knows the answer for sure. So, let’s consider both sides.

Another false dawn

First, we’ve seen a rebound in inflation. True, this hasn’t been massive. But it has pushed the Bank of England to warn that the pace of interest rate cuts is likely to be slower going forward. This latest development has consequences for affordability and could put off some potential buyers. This includes those looking for their first property, who Persimmon targets more than some of its rivals do.

Investors also need to be aware that the company, like many other large UK businesses, faces additional National Insurance contributions from April. The proposed Buildings Safety Levy could reduce the amount of money it has available for buying land as well.

Throw in the “ongoing macroeconomic and geopolitical uncertainties” mentioned in the results announcement and it’s quite possible that Persimmon will continue to lag the FTSE 100 for the rest of 2025.

Ready to recover

On the other hand, there’s no sign that last year’s trading momentum has slowed just yet. Indeed, the sales rate was 14% higher in the first nine weeks of 2025 than over the same period in 2024.

The company also believes it will build between 11,000 and 11,500 homes this year. The higher of those two numbers would amount to an increase of almost 8% on last year. Cost growth is expected to be lower too.

Longer term, Persimmon’s status as one of the UK’s biggest builders should mean it plays a key role in meeting demand for new homes. And the current government does seem very supportive of this, even if the goal of building 1.5m properties in just five years may prove too ambitious.

Last, there’s the dividend stream to think about. Even though the total payout was slashed back in 2022, the share depreciation since means the forecast yield currently comes in at a very attractive 5.4%. For comparison, the average yield in the FTSE 100 is around 3.5%.

While never guaranteed, having that passive income hit my account should keep me patient until the housing market truly revives.

The last 12 months have been a bit rough for the Taylor Wimpey (LSE:TW.) share price. Like many homebuilder stocks, Taylor Wimpey enjoyed a bit of a rally following the general election in 2024. Yet since then, investor sentiment has seemingly soured, resulting in shares falling by nearly 20% since last March.

However, the long-awaited planning reform bill by the new government is starting to see the light of day. And it promises to deliver the “biggest building boom in a generation”.

Considering the plan intends to deliver an extra 1.5m homes by 2029, that’s a pretty nice tailwind for Taylor Wimpey if successful. After all, the company’s sitting on a pretty extensive landbank of 79,000 plots. And with less bureaucracy plaguing the construction industry, the time and money spent before shovels are put into the ground should be drastically shortened. In theory, that means higher completions at a lower cost.

So what does this all mean for Taylor Wimpey’s share price over the next 12 months?

Growth in 2025

Assuming the government’s planning reform strategy is a success, the outlook for Taylor Wimpey looks fairly positive. Revenue projections for 2025 and 2026 indicate up to 11.5% and 8.9% growth respectively. Meanwhile, earnings growth is expected to follow at 5.3% and 18.3% respectively, demonstrating the impact of anticipated wider profit margins over time.

Translating this into a projected share price, the 12 analysts keeping tabs on Taylor Wimpey currently have an average target of 142p. Compared to where the stock’s trading today, that’s just over a 25% expected jump. And if accurate, a £1,000 investment today could be worth around £1,250 by this time next year.

Taking a step back

Earning a 25% return in one year is pretty impressive. Don’t forget the stock market average in the UK is usually only around 8%. However, like all forecasts, this outlook’s dependent on building activity ramping up. And that may prove more challenging than expected.

There’s also no guarantee that the reformed planning bill will even be a success. After all, this isn’t the first time a government has tried to solve Britain’s housing problem. Meanwhile, the country’s notoriously short on skilled builders, meaning that even with easier planning permission, construction rates might still lag.

There’s also the risk of oversupply to consider. If every homebuilder starts constructing more houses all at once, the increase in supply would likely cause house prices to fall. That’s good news for consumers but not so much for Taylor Wimpey’s profit margins, even with the benefit of lower planning costs.

Time to buy?

The future of Taylor Wimpey’s share price may not be as clear cut as analyst forecasts would imply. However, the firm appears to be well-positioned to capitalise on the new government policy. As such, investors may want to consider taking a closer look at this enterprise.

2025’s been a great year for the Aviva (LSE:AV.) share price so far. The insurance giant has seen its valuation climb by around 11%, which is backed by impressive results and a potentially incoming boost to profitability. But is this growth just the tip of the iceberg for shareholders?

Let’s explore where the Aviva share price could end up 12 months from now.

A strategy-altering acquisition

Aviva has its fingers in many cookie jars within the insurance industry. However, one of the major pots is life insurance. While these products are more predictable compared to property & casualty insurance, they’re quite capital intensive. As such, management’s slowly been diversifying into offering cash-generative alternatives.

As of December, 56% of the group’s operating profits originate from its capital-light offer. But by the end of 2025, it could be as much as 70% should the group’s £3.7bn takeover of Direct Line succeed. The acquisition’s been in the works for several months now. And if everything goes to plan, it should close towards the middle of this year, adding more motor and home insurance to its overall portfolio.

However, performance within the firm’s life insurance business is still performing strongly. 2024 marked one of the best years in the company’s history for bulk purchase annuity (BPA) sales, delivering a record £7.8bn across 61 deals to companies including National Grid, RAC, and Michelin.

As a quick reminder, BPAs allow businesses to offload some of the risks of running defined benefit pension plans. They’re only really a viable option when interest rates are high, making them relatively unpopular until recently – a shift that insurance companies like Aviva are capitalising on.

12-month share price target

With an expected boost to profitability and financial flexibility, it’s natural to assume the 12-month outlook for Aviva’s share price is positive. Yet, looking at the consensus from institutional analysts, most seem to think the stock’s fairly valued right now.

Aviva’s share price target for March 2026 is only 565p, which, based on where it’s trading right now, is only a 5% jump. This implies that the expected benefits of the Direct Line deal are already baked into the stock price. As such, management will likely have to deliver results that are better than expected for the stock to climb higher.

In the long run, expansion shouldn’t be too challenging for one of the largest insurance companies in Britain. However, it’s worth pointing out that a significant chunk of Aviva’s income is coming from the sale of BPAs. While that’s advantageous for now, consistently beating its record sales will likely become far more challenging as the Bank of England eventually cuts interest rates, dampening demand – a risk that must be considered.

All things considered, I’m cautiously optimistic about Aviva’s long-term potential. With shares enjoying a double-digit rally over the last few months, the stock price might see some temporary weakness from profit-taking activity. However, this could provide a nicer entry point.

For my portfolio, I’ve already gained enough exposure to the insurance industry So, I’m not planning on buying any shares right now. But for other investors, Aviva may be worth taking a closer look.

A lot of eyes are fixed on the Shell (LSE:SHEL) share price as we approach the firm’s highly anticipated capital markets day later this month. Shares of the oil & gas giant have been fairly stagnant over the past year, only rising by around 4%.

This holding pattern appears to be linked to both mixed results and investors eagerly awaiting the unveiling of CEO Wael Sawan’s next steps in the strategy to “deliver more value with less emissions”.

Yet that still hasn’t stopped some institutional analysts from speculating where the stock price could go by this time next year. And for the most part, sentiment appears to be quite bullish, with an average 12-month price target of 3,253.49p.

If these predictions prove accurate, then investing £1,000 right now could grow to £1,264 in a year’s time. And that’s before considering the extra gains from dividends paid over the period. But what’s driving these expectations?

Higher savings, lower profits

Income attributable to shareholders in 2024 shrank by 17% and came in lower than expectations. The cause wasn’t due to disruptions in production. In fact, the barrels of oil equivalents per day (boepd) expanded by 2% during the year. Instead, targets were missed on the back of falling oil & gas prices, resulting in its downstream margins getting squeezed.

However, despite earnings moving in the wrong direction, management seems to be getting its costs under control. Capital expenditure throughout the year actually came in lower than expected at $21.1bn versus the $22bn-$25bn investors were anticipating. This also marks a 13.6% reduction compared to 2023, enabling cash flow from operating activities to come in flat, rising by 1% even with lower profits.

Subsequently, management’s used this flexibility to pay down its debt from $81.5bn to $77.1bn. When factoring in the group’s spare cash & equivalents, Shell’s net debt position has fallen from $43.5bn to $38.8bn, improving the gearing from 18.8% to 17.7%.

These are all encouraging signs of a healthier balance sheet. And it likely explains why management was comfortable launching a new $3.5bn share buyback programme along with giving a 4% bump to dividends back in January.

What now?

Improved capital allocation and higher annualised savings are a welcome sight for shareholders. And should oil prices start rising again, Shell seems on track to become a leaner, more profitable operation in the long run.

However, it’s important to remember that oil prices are notoriously cyclical. In recent weeks, the price of hydrocarbons has been steadily falling, putting further pressure on Shell’s profit margins. And should this trend continue, 2025 could prove to be another challenging year.

Personally, I believe Shell has some interesting potential ahead, depending on the vision of Sawan. Investors will soon discover exactly what he has planned on 25 March during the capital markets day. So until then, I’m not rushing to add any Shell shares to my portfolio, even with bullish predictions coming from analysts.