Update shared on 14 Nov 2025
Fair value Increased 0.14%The analyst price target for Santos has increased slightly from A$7.76 to A$7.77. This reflects analysts' view that the withdrawal of a takeover proposal and expectations for improved cash flow from major projects support a higher valuation.
Analyst Commentary
Recent updates from street research providers offer insight into the varied perspectives among analysts following the withdrawal of the takeover proposal for Santos. Their commentary highlights both optimistic expectations and lingering reservations that may impact the company's valuation and execution.
Bullish Takeaways
- Bullish analysts point to the delivery of major projects such as Barossa and Pikka as catalysts for unlocking significant free cash flow over the next five years.
- Expectations for improved operational execution and discipline are seen as supportive factors for sustained growth and a higher share price.
- The removal of the takeover overhang restores a clearer focus on the company’s organic value creation and strategic autonomy.
- Valuation upside is highlighted, with several price targets set above the current market level. This reflects improved confidence in Santos’s forward trajectory.
Bearish Takeaways
- Some analysts remain cautious about potential execution risks as Santos embarks on delivering complex, capital-intensive projects.
- There is concern about the sector’s ongoing volatility, which could pressure cash flows and affect the realization of the company’s growth plans.
- Uncertainty around broader market and commodity pricing conditions could impact the pace and scale of future value creation.
What's in the News
- Santos announced the resignation of Chief Financial Officer Ms. Sherry Duhe and the appointment of Mr. Lachlan Harris as Acting CFO. This marks a leadership transition in the company (Key Developments).
- The proposed AUD 28.8 billion acquisition of Santos Limited by XRG P.J.S.C, Abu Dhabi Developmental Holding Company PJSC, and The Carlyle Group Inc. was cancelled following due diligence and negotiations (Key Developments).
- Santos Limited declared an ordinary fully franked dividend of USD 0.1340 per security for the six months ended June 30, 2025. The record date is September 3, 2025, and payment is scheduled for October 1, 2025 (Key Developments).
Valuation Changes
- Consensus Analyst Price Target: Increased slightly from A$7.76 to A$7.77, reflecting an incremental upward adjustment.
- Discount Rate: Decreased from 7.02% to 6.71%, which suggests a lower perceived risk in future cash flows.
- Revenue Growth: Remained stable at 9.39%, indicating no change in near-term growth expectations.
- Net Profit Margin: Marginally declined from 22.65% to 22.65%, showing near stability in profitability forecasts.
- Future P/E: Fallen moderately from 12.95x to 12.79x, which points to a slight increase in forecast earnings relative to price.
Disclaimer
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