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Santos Limited
(Sydney:STO)
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Rating:64Neutral
Price Target:
AU$8.50
▲(4.29% Upside)
Action:Reiterated
Date:08/19/26
The score is driven primarily by mixed financial performance (still profitable, but weakening revenue/returns with higher leverage and pressured free cash flow), partially offset by strong technical uptrend signals. Valuation is moderately supportive via the dividend but not outright cheap on P/E, while the latest earnings call adds a constructive outlook for stronger H2 production and cash generation despite near-term balance-sheet and commissioning/ramp-up risks.
Positive Factors
Growth projects are ramping
Barossa and Pikka add material production capacity to Santos’s portfolio. Their planned ramp-up should support higher volumes, revenue and operating cash generation over the next several months and strengthen the company’s medium-term production base.
Negative Factors
Prolonged revenue and earnings decline
Several years of shrinking revenue and materially lower earnings indicate weakening underlying earnings power. Even with new projects ramping, Santos must offset portfolio declines and commodity exposure to restore a sustained growth trajectory.
Read all positive and negative factors
Positive Factors
Negative Factors
Growth projects are ramping
Barossa and Pikka add material production capacity to Santos’s portfolio. Their planned ramp-up should support higher volumes, revenue and operating cash generation over the next several months and strengthen the company’s medium-term production base.
Read all positive factors
Santos Limited (STO) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$26.60B
Dividend Yield3.75%
Average Volume (3M)10.68M
Price to Earnings (P/E)25.7
Beta (1Y)0.16
Revenue Growth-8.49%
EPS Growth-31.47%
CountryAU
Employees4,028
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.23
Shares Outstanding3,247,773,000
10 Day Avg. Volume10,488,260
30 Day Avg. Volume10,678,604
Financial Highlights & Ratios
PEG Ratio-0.75
Price to Book (P/B)1.28
Price to Sales (P/S)3.80
P/FCF Ratio31.11
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$8.48Price Target Upside4.06% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)0.46
Revenue Forecast (FY)AU$6.75B
Santos Limited Business Overview & Revenue Model
Company Description
Santos Limited explores, develops, produces, transports, and markets hydrocarbons in Australia and Papua New Guinea. The company’s assets are located in the Alaska, Cooper Basin, Queensland and New South Wales, Papua New Guinea, Northern Australia...
How the Company Makes Money
Santos makes money primarily by producing and selling hydrocarbons—natural gas (including LNG), crude oil, condensate, and natural gas liquids—generated from its operated and non-operated assets. Revenue is earned through (1) domestic gas sales: l...
Santos Limited Earnings Call Summary
Earnings Call Date:Aug 18, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Feb 23, 2027
Earnings Call Sentiment Positive
The call presents a constructive and forward-looking picture: Santos brought major growth projects online (Pikka, Barossa), delivered strong plant reliability and safety, declared a dividend, and set clear targets (breakeven $45–$50/bbl, $2.5bn net debt reduction by 2030). Near-term H1 cash generation was constrained by expected commissioning costs, cargo timing and an underlift position, and gearing remains above target, but management expects these effects to unwind and for materially stronger cash generation in H2 as Barossa and Pikka ramp towards plateau and realized LNG pricing improves. Overall the positives (project starts, rising H2 guidance, operational reliability, pricing tailwinds and disciplined capital framework) outweigh the near-term lowlights tied largely to timing and commissioning.Positive Updates
Revenue, EBITDAX and Dividend
Sales revenue of $2.6 billion, EBITDAX of $1.6 billion and declared interim dividend of USD 0.116 per share; free cash flow from operations was $378 million (affected by commissioning and timing items).
Negative Updates
H1 Free Cash Flow Impacted by Commissioning and Timing
Free cash flow from operations of $378 million in H1 was reduced by commissioning costs at Barossa and Pikka, timing of cargo receipts (around $300 million of Barossa/PNG cargo proceeds received after period end) and a PNG LNG underlift of ~1.3 million boe that will reverse in H2.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue, EBITDAX and Dividend
Sales revenue of $2.6 billion, EBITDAX of $1.6 billion and declared interim dividend of USD 0.116 per share; free cash flow from operations was $378 million (affected by commissioning and timing items).
Read all positive updates
Company Guidance
The guidance from the call was that Santos expects materially stronger H2 cash generation with second‑half production ~20–30% higher than H1, supported by July’s stronger performance, and the Board declared an interim dividend of USD 0.116/share; H1 results were sales revenue $2.6bn, EBITDAX $1.6bn and free cash flow from operations $378m, with H1 production 45.6 million boe (up 3% y/y). Key operational targets include Pikka ramping from ~23,000 bbl/d gross in H1 to an ~80,000 bbl/d gross plateau by end‑Q3 (first cargo 450,000 barrels lifted), Barossa’s six wells at ~300 mmscfd each with Barossa production ~550 mmscfd rising to ~600 mmscfd by quarter‑end and an ~8‑day cargo cadence, LNG sales 7.7 Mt gross, H1 LNG realized $10.95/MMBtu and crude realized ~$92/bbl, unit production cost $7.53/boe (target < $7/boe over time) and LNG upstream unit cost $6.80/boe. Balance sheet and risk metrics: net debt ≈ $6bn, liquidity $3.8bn, gearing 28.1% incl leases (23.2% excl) with no maturities before Sep‑2027, target gearing 15–25% and $2.5bn net‑debt reduction by 2030; free‑cash‑flow breakeven $45–50/bbl to 2030 (operational breakeven < $35/bbl) and sensitivity that each $10 Brent above breakeven lifts FCF from ~ $400m today to ~$550–600m at plateau. H2 hedges: 11.5m bbl zero‑cost collars (floor $67.10, avg cap $98.59); FX hedges AUD975m at $0.643 (H2) and ~AUD1.5bn at $0.658 (2027).Santos Limited Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
60
Neutral
Cash Flow
52
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.10B | 5.26B | 5.40B | 5.89B | 7.79B | 4.71B |
| Gross Profit | 1.25B | 1.62B | 3.70B | 2.22B | 5.64B | 1.59B |
| EBITDA | 2.07B | 3.46B | 3.67B | 3.97B | 4.97B | 2.65B |
| Net Income | 735.89M | 846.53M | 1.22B | 1.42B | 2.11B | 658.00M |
Balance Sheet | ||||||
| Total Assets | 30.52B | 32.05B | 29.63B | 29.76B | 28.86B | 31.02B |
| Cash, Cash Equivalents and Short-Term Investments | 1.13B | 1.72B | 1.86B | 2.28B | 2.46B | 2.97B |
| Total Debt | 7.36B | 7.54B | 6.69B | 6.16B | 5.52B | 8.02B |
| Total Liabilities | 14.82B | 16.37B | 14.10B | 14.48B | 14.01B | 16.40B |
| Stockholders Equity | 15.70B | 15.68B | 15.54B | 15.28B | 14.84B | 13.57B |
Cash Flow | ||||||
| Free Cash Flow | 256.65M | 642.66M | 449.00M | 889.00M | 2.15B | 1.07B |
| Operating Cash Flow | 1.85B | 2.65B | 2.85B | 3.26B | 4.56B | 2.27B |
| Investing Cash Flow | -1.61B | -1.99B | -2.69B | -2.90B | -1.67B | -137.00M |
| Financing Cash Flow | -978.11M | -818.58M | -206.00M | -860.00M | -3.40B | -481.00M |
Santos Limited Technical Analysis
Positive
8.15
Price Trends
7.69
Positive
7.63
Positive
7.14
Positive
Market Momentum
0.16
Positive
61.32
Neutral
60.93
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:STO, the sentiment is Positive. The current price of 8.15 is above the 20-day moving average (MA) of 8.07, above the 50-day MA of 7.69, and above the 200-day MA of 7.14, indicating a bullish trend. The MACD of 0.16 indicates Positive momentum. The RSI at 61.32 is Neutral, neither overbought nor oversold. The STOCH value of 60.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:STO.
Santos Limited Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | AU$60.45B | 14.16 | 8.55% | 5.12% | -9.52% | -0.68% | |
71 Outperform | AU$1.21B | 7.35 | 12.15% | 2.48% | -19.58% | -39.27% | |
67 Neutral | AU$80.62M | 5.75 | 14.63% | 2.69% | -45.07% | 297.79% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
64 Neutral | AU$26.60B | 25.72 | 4.69% | 3.75% | -8.49% | -31.47% | |
63 Neutral | AU$1.96B | 6.96 | 8.74% | 3.49% | -8.77% | ― | |
43 Neutral | AU$406.96M | -15.98 | -12.35% | ― | ― | 25.55% |
* Energy Sector Average
AU:STO
Santos Limited
8.21
0.81
10.90%
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0.86
-0.29
-24.96%
AU:BTL
Empire Energy Group Limited
0.27
-0.05
-15.62%
AU:KAR
Karoon Energy Ltd
1.74
0.15
9.39%
AU:ECH
New Zealand Oil & Gas Limited
0.36
<0.01
1.98%
AU:WDS
Woodside Energy Group
31.83
8.34
35.49%
Santos Limited Corporate Events
Santos lifts output and cash generation as Pikka and Barossa ramp up
Aug 18, 2026
Santos reported a solid first half of 2026, with production rising 3 per cent to 45.6 mmboe, sales revenue of $2.6 billion and EBITDAX of $1.6 billion, backed by record personal safety performance. Free cash flow from operations was $378 million, ...
Santos Declares Ordinary Dividend for June 2026 Period
Aug 18, 2026
Santos Limited has declared a six-month dividend on its ASX-listed ordinary fully paid shares, reflecting the financial period ended 30 June 2026. The distribution has been set at USD 0.116 per share, underlining continued cash returns to investor...
Santos Half-Year Profit Falls Despite Revenue Growth
Aug 18, 2026
Santos Limited reported revenue from ordinary activities of US$2,620 million for the half-year ended 30 June 2026, a modest 2% increase year on year. However, statutory net profit attributable to members fell 19% to US$355 million, while underlyin...
Santos schedules webcast for 2026 half-year results
Aug 9, 2026
Santos has scheduled the release of its 2026 half-year financial results for 19 August 2026, with a webcast and conference call to brief investors and analysts on the company’s performance. Managing Director and CEO Kevin Gallagher, CFO Lach...
Santos Marks First Barossa Condensate Export as Darwin LNG Nears Full Output
Jul 26, 2026
Santos has completed the sale and loading of the first condensate cargo from the Barossa gas project, marking a key milestone alongside ramp-up of LNG output at the Darwin LNG plant. The shipment of about 300,000 barrels from the BW Opal FPSO to S...
Santos ramps up Barossa and Pikka as high-return projects and LNG pricing set up stronger second-half cash flow
Jul 22, 2026
Santos reported a solid operational quarter as its Barossa LNG project ramped up to 97 per cent of planned rates and the Pikka oil development advanced toward plateau production, driving second-quarter output to 23.1 mmboe and a 3 per cent sequent...
Santos Reports Lapse of 168,936 Share Acquisition Rights
Jul 13, 2026
Santos Limited has notified the market of the cessation of a tranche of share acquisition rights, reflecting an adjustment to its issued capital structure. The affected securities, identified under the ASX code STOAY, represent conditional rights ...
Santos Issues New Shares Following Conversion of Unquoted Securities
Jul 13, 2026
Santos Limited has notified the market of the issue of 128,143 fully paid ordinary shares, following the exercise or conversion of previously unquoted equity securities. The new shares, dated April 30, 2026, modestly increase the company’s l...
Santos reports lapse of 23,494 share acquisition rights under SHAREMATCH plan
Jul 13, 2026
Santos Limited has notified the market of the cessation of 23,494 share acquisition rights under its SHAREMATCH plan, recorded as STOAZ securities on the ASX. The rights lapsed on 16 May 2026 because the conditions attached to these conditional ri...
Santos Issues New Ordinary Shares Following Conversion of Unquoted Securities
Jul 13, 2026
Santos Limited has notified the market of the issue of 4,593 fully paid ordinary shares following the conversion of previously unquoted securities. The new STO shares, issued on 19 May 2026, reflect the exercise or conversion of unquoted options o...
Santos seals 10-year gas deal to anchor South Australia’s strategic reserve
Jun 29, 2026
Santos has signed a 10-year Gas Sale Agreement with the South Australian Government to supply 200 petajoules of domestic gas from 2030 to 2040 for the state’s Strategic Gas Reserve, with deliveries ex-Moomba and indexed pricing under a prepa...
Santos ramps up Alaska’s Pikka Phase 1 as production moves to continuous operations
Jun 22, 2026
Santos Limited has started continuous production operations at its Pikka Phase 1 oil project on Alaska’s North Slope, with initial wells delivering around 20,000 barrels a day and seawater injection for pressure support to begin in the comin...
Santos Discloses Initial Share Interests of New Director Katherine Vidgen
Jun 16, 2026
Santos Limited has appointed Katherine Vidgen as a director effective 17 June 2026, and has disclosed her initial interests in the company’s securities in line with ASX listing rules. The filing shows Vidgen holds no Santos shares directly, ...
Santos appoints Kate Vidgen as independent non-executive director
Jun 16, 2026
Santos Limited has appointed Kate Vidgen as an independent non-executive director effective 17 June 2026, bringing in a seasoned finance executive with extensive experience across energy, resources, infrastructure and technology. Vidgen’s ba...
Santos flags cash flow surge and capex cuts as Barossa and Pikka come online
May 26, 2026
Santos used its 2026 Investor Briefing Day in Sydney to outline a sharpened strategy built around tier-1 basins, highlighting the start-up of the Barossa gas project and Pikka phase 1 in Alaska, both expected to reach low-cost plateau production i...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.