Santos Limited

ASX:STO Stock Report

Market Cap: AU$22.0b

Santos Valuation

Is STO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of STO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: STO (A$6.8) is trading below our estimate of fair value (A$22.44)

Significantly Below Fair Value: STO is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for STO?

Key metric: As STO is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for STO. This is calculated by dividing STO's market cap by their current earnings.
What is STO's PE Ratio?
PE Ratio11.3x
EarningsUS$1.26b
Market CapUS$14.30b

Price to Earnings Ratio vs Peers

How does STO's PE Ratio compare to its peers?

The above table shows the PE ratio for STO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average8.3x
WDS Woodside Energy Group
16.3x-2.1%AU$46.3b
KAR Karoon Energy
2.8x-12.1%AU$1.1b
HZN Horizon Oil
7.6x4.2%AU$309.1m
YAL Yancoal Australia
6.6x-1.1%AU$8.4b
STO Santos
11.3x12.7%AU$22.0b

Price-To-Earnings vs Peers: STO is expensive based on its Price-To-Earnings Ratio (11.3x) compared to the peer average (8.3x).

Price to Earnings Ratio vs Industry

How does STO's PE Ratio compare vs other companies in the AU Oil and Gas Industry?

3 CompaniesPrice / EarningsEstimated GrowthMarket Cap
FAR FAR
0.8xn/aUS$29.44m
IKW Ikwezi Mining
1.7xn/aUS$12.55m
XST Xstate Resources
0.7xn/aUS$1.89m
No more companies available in this PE range
STO 11.3xIndustry Avg. 12.7xNo. of Companies5PE01020304050+
3 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: STO is good value based on its Price-To-Earnings Ratio (11.3x) compared to the Australian Oil and Gas industry average (12.7x).

Price to Earnings Ratio vs Fair Ratio

What is STO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

STO PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio11.3x
Fair PE Ratio13.8x

Price-To-Earnings vs Fair Ratio: STO is good value based on its Price-To-Earnings Ratio (11.3x) compared to the estimated Fair Price-To-Earnings Ratio (13.8x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst STO forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentAU$6.80
AU$8.38
+23.2%
15.6%AU$12.81AU$7.32n/a14
Nov ’25AU$6.83
AU$8.51
+24.6%
14.0%AU$12.65AU$7.74n/a14
Oct ’25AU$7.00
AU$8.28
+18.3%
13.8%AU$12.20AU$7.32n/a14
Sep ’25AU$7.22
AU$8.56
+18.6%
13.2%AU$12.59AU$7.55n/a15
Aug ’25AU$8.04
AU$8.70
+8.2%
12.7%AU$12.58AU$7.61n/a15
Jul ’25AU$7.63
AU$8.43
+10.5%
12.1%AU$11.92AU$7.54n/a15
Jun ’25AU$7.63
AU$8.46
+10.9%
12.2%AU$11.94AU$7.55n/a15
May ’25AU$7.54
AU$8.50
+12.8%
12.0%AU$12.06AU$7.63n/a15
Apr ’25AU$7.75
AU$8.63
+11.3%
12.3%AU$12.31AU$7.77n/a15
Mar ’25AU$7.20
AU$8.66
+20.2%
12.4%AU$12.39AU$7.82n/a15
Feb ’25AU$7.76
AU$8.90
+14.7%
13.6%AU$12.27AU$7.78n/a11
Jan ’25AU$7.60
AU$8.64
+13.7%
13.4%AU$12.04AU$7.09n/a13
Dec ’24AU$6.90
AU$8.80
+27.5%
10.8%AU$11.80AU$7.78n/a15
Nov ’24AU$7.74
AU$9.07
+17.2%
11.1%AU$12.28AU$7.94AU$6.8315
Oct ’24AU$7.90
AU$9.09
+15.0%
11.0%AU$12.37AU$8.04AU$7.0015
Sep ’24AU$7.81
AU$9.07
+16.1%
10.6%AU$12.34AU$8.05AU$7.2216
Aug ’24AU$8.02
AU$9.05
+12.8%
11.6%AU$12.54AU$7.90AU$8.0416
Jul ’24AU$7.52
AU$8.96
+19.1%
11.5%AU$12.17AU$7.80AU$7.6316
Jun ’24AU$7.34
AU$9.12
+24.3%
11.6%AU$12.43AU$7.94AU$7.6316
May ’24AU$7.23
AU$8.96
+23.9%
11.5%AU$12.11AU$7.73AU$7.5416
Apr ’24AU$6.90
AU$9.09
+31.8%
11.7%AU$12.20AU$7.83AU$7.7516
Mar ’24AU$7.06
AU$9.20
+30.3%
11.3%AU$12.16AU$7.80AU$7.2017
Feb ’24AU$7.04
AU$8.99
+27.6%
10.9%AU$11.74AU$7.68AU$7.7617
Jan ’24AU$7.14
AU$9.37
+31.2%
9.9%AU$12.16AU$8.13AU$7.6017
Dec ’23AU$7.43
AU$9.03
+21.6%
9.0%AU$11.13AU$7.90AU$6.9016
Nov ’23AU$7.85
AU$9.54
+21.5%
8.3%AU$11.20AU$8.28AU$7.7416

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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