Update shared on 28 Nov 2025
Fair value Increased 0.58%Analysts have slightly raised their price target for Santos from A$7.77 to A$7.82. They highlight an improved outlook following the withdrawal of the XRG consortium’s takeover bid and expectations for increased free cash flow as major projects advance.
Analyst Commentary
Bullish Takeaways- Bullish analysts highlight renewed confidence in Santos following the recent withdrawal of the XRG consortium’s takeover offer, which has removed major deal-related uncertainties.
- There is an expectation that the delivery of key projects such as Barossa and Pikka will unlock significant free cash flow over the next five years. This is seen as supportive of higher shareholder returns.
- Some see notable upside potential in Santos shares, with price targets reflecting improved operational visibility and progress on growth initiatives.
- Solid project execution and a more favorable outlook for oil and gas demand are contributing factors to positive revisions in ratings and valuations.
- Cautious analysts point out that while major project milestones are in focus, execution risks remain, particularly regarding development timelines and cost management.
- There are valuation concerns as recent share price gains could limit further upside in the near term if broader market sentiment weakens.
- Some remain mindful of external factors, including commodity price volatility and regulatory changes, that may challenge the sustainability of cash flow improvements.
What's in the News
- Santos announced the resignation of Ms. Sherry Duhe as Chief Financial Officer and the appointment of Mr. Lachlan Harris as Acting Chief Financial Officer. Mr. Harris has extensive experience in the company's finance roles, having joined Santos in 2010 and previously acting as CFO. (Key Developments)
- XRG P.J.S.C, Abu Dhabi Developmental Holding Company PJSC and The Carlyle Group Inc. cancelled their proposed acquisition of Santos Limited (ASX:STO) on September 17, 2025, ending negotiations for a potential AUD 28.8 billion deal. (Key Developments)
- Santos Limited announced an ordinary fully franked dividend of USD 0.1340 per security for the six months ended June 30, 2025, with payment scheduled for October 1, 2025. (Key Developments)
Valuation Changes
- Consensus Analyst Price Target: The fair value estimate has risen slightly from A$7.77 to A$7.82.
- Discount Rate: The discount rate has increased marginally, moving from 6.71% to 6.72%.
- Revenue Growth: Revenue growth projections have edged down modestly from 9.39% to 9.34%.
- Net Profit Margin: The net profit margin estimate has declined from 22.65% to 22.24%.
- Future P/E: The forward price-to-earnings ratio is expected to rise, moving from 12.79x to 13.16x.
Disclaimer
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