Abstract Stringer frame stiffened shell structures are frequently used as primary structures of aerospace applications. They show a high load carrying capacity combined with a low mass. The design is complex because of three reasons: Firstly, there exists a high number of design variables making the design of such a shell very demanding using numerical methods such as the finite element method. Secondly, such a shell can exhibit different local instabilities before failing globally. And thirdly, the calculation of the panel instability load is not fully possible yet, especially when using closed and therefore torsional stiff stringer stiffener. Within this paper, a novel approach for the calculation of the panel instability load of stringer frame stiffened shell structures with torsional stiff stringer under axial compression is introduced. The novelty is expressed in the consideration of transverse shear and prebuckling deformations. It is shown that in contrast to unstiffened shell structures both aspects cannot be neglected and have a significant influence on the buckling load. The classical smearing method is expanded and used in a consecutive utilization of the Ritz method to calculate the panel instability load. Geometrically non-linear finite element analyses are performed to validate the novel approach and establish a domain of applicability. The suggested approach delivers excellent results for the prediction of the panel instability load.