Santos Limited (STO) AI Stock Analysis

• Market Cap: $19.80B
• Dividend Yield: 6.06%
• Average Volume (3M): 8.64M
• Price to Earnings (P/E): 12.5
• Beta (1Y): 0.85
• Revenue Growth: -5.81%
• EPS Growth: -17.90%
• Country: AU
• Employees: 3,958
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.23
• Shares Outstanding: 3,247,773,000
• 10 Day Avg. Volume: 9,245,444
• 30 Day Avg. Volume: 8,637,240
• PEG Ratio: -0.95
• Price to Book (P/B): 0.87
• Price to Sales (P/S): 2.50
• P/FCF Ratio: 30.03
• Enterprise Value/Market Cap: 1.64
• Enterprise Value/Revenue: 6.16
• Enterprise Value/Gross Profit: 9.11
• Enterprise Value/Ebitda: 9.21
• 1Y Price Target: $7.48
• Price Target Upside: 23.78% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): 0.47
• Revenue Forecast (FY): $7.76B

• Rating: 65 Neutral
• Price Target: AU$7.00 ▲(15.89% Upside)

Santos Limited's overall stock score reflects strong financial and operational performance, as highlighted in the earnings call, and a reasonable valuation. However, technical analysis indicates bearish momentum, and financial performance is challenged by declining revenues and cash flow issues.

Santos Limited Business Overview & Revenue Model

Company Description

Santos Limited (STO) is a leading Australian oil and gas exploration and production company, primarily engaged in the development and production of hydrocarbons. With a strong presence in the Asia-Pacific region, Santos operates across various sectors including oil and gas exploration, production, and liquefied natural gas (LNG) processing. The company is known for its commitment to sustainable practices and innovation within the energy sector, offering products and services that support energy needs while minimizing environmental impact.

How the Company Makes Money

Santos Limited generates revenue primarily through the exploration, production, and sale of oil and natural gas. The company earns money by extracting hydrocarbons from its various projects, which are then sold to domestic and international markets. Key revenue streams include crude oil sales, natural gas sales, and liquefied natural gas (LNG) exports. Additionally, Santos benefits from long-term contracts with major customers, which provide a stable income base. The company has significant partnerships and joint ventures with other energy firms, enhancing its operational capacity and market reach. Factors contributing to its earnings include global oil and gas prices, production efficiency, and strategic asset management.

Santos Limited Financial Statement Overview

Summary

Santos Limited shows strong profitability with high gross profit margins and a solid equity base. However, declining revenues and reduced cash flow generation present challenges, necessitating strategic improvements in revenue growth and cash management.

Income Statement

Santos Limited has shown strong gross profit margins, consistently above 60% in recent years, indicating effective cost management. However, there is a notable decline in total revenue from 2022 to 2024, with a revenue decrease of 8.2% in 2024 compared to 2023. The net profit margin in 2024 is 22.7%, slightly lower than 24% in 2023, showing solid profitability despite revenue challenges. EBIT margin data for 2024 is missing, but EBITDA margins remain healthy. Overall, strong profitability metrics are tempered by declining revenue trends.

Balance Sheet

The company maintains a stable balance sheet with a debt-to-equity ratio of 0.43 in 2024, reflecting manageable leverage. The equity ratio of 52.4% indicates a strong equity base. However, the return on equity has decreased to 7.9% in 2024 from 9.3% in 2023, suggesting a decline in efficiency at generating profits from equity. The balance sheet remains robust, with consistent asset management, albeit with some pressure on equity returns.

Cash Flow

Santos Limited experienced a significant decline in free cash flow from 2023 to 2024, dropping by 49.5%, highlighting potential cash flow management challenges. Operating cash flow data is missing for 2024, making it difficult to fully assess cash generation capabilities. Despite this, the company has maintained positive free cash flow, though at reduced levels, suggesting a need for improved cash flow management to support financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.27B	5.40B	5.89B	7.79B	4.71B	3.39B
Gross Profit	3.56B	3.70B	2.22B	5.64B	1.59B	1.76B
EBITDA	3.52B	3.67B	3.97B	4.97B	2.65B	941.00M
Net Income	1.03B	1.22B	1.42B	2.11B	658.00M	-357.00M
Balance Sheet
Total Assets	29.88B	29.63B	29.76B	28.86B	31.02B	17.66B
Cash, Cash Equivalents and Short-Term Investments	1.83B	1.86B	2.28B	2.46B	2.97B	1.32B
Total Debt	6.79B	6.69B	6.16B	5.52B	8.02B	5.00B
Total Liabilities	14.17B	14.10B	14.48B	14.01B	17.45B	10.43B
Stockholders Equity	15.71B	15.54B	15.28B	14.84B	13.57B	7.23B
Cash Flow
Free Cash Flow	694.00M	449.00M	889.00M	2.15B	1.07B	1.29B
Operating Cash Flow	2.96B	2.85B	3.26B	3.86B	2.14B	1.48B
Investing Cash Flow	-2.47B	-2.69B	-2.90B	-1.67B	-137.00M	-1.46B
Financing Cash Flow	-307.00M	-206.00M	-860.00M	-3.40B	-481.00M	246.00M

Santos Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.04
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:STO, the sentiment is Negative. The current price of 6.04 is below the 20-day moving average (MA) of 6.42, below the 50-day MA of 6.43, and below the 200-day MA of 6.74, indicating a bearish trend. The MACD of -0.10 indicates Positive momentum. The RSI at 28.57 is Positive, neither overbought nor oversold. The STOCH value of 12.30 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:STO.

Santos Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WDS	71 Outperform	AU$45.56B	10.00	8.51%	7.12%	17.13%	61.35%
KAR	67 Neutral	AU$1.15B	5.76	13.85%	4.67%	-17.02%	-35.47%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
STO	65 Neutral	$19.80B	12.52	6.59%	6.06%	-5.81%	-17.90%
BPT	60 Neutral	AU$2.57B	-58.33	-1.02%	7.92%	17.16%	90.79%
STX	45 Neutral	AU$377.94M	-1.91	-42.02%	―	59.48%	-1714.71%
TBN	35 Underperform	AU$761.95M	-9.05	-14.41%	―	―	―

Santos Limited Corporate Events

Santos Limited Secures US$1 Billion Bond to Strengthen Growth

Santos Limited has successfully priced a US$1 billion senior unsecured fixed rate bond in the US dollar Rule 144A/Reg S market, with a 5.75% coupon maturing in November 2035. This transaction, supported by strong debt capital market backing, aims to maintain Santos’ robust balance sheet and liquidity, enabling disciplined growth and strong returns for shareholders.

Santos Limited Reports Strong Q3 Performance and Strategic Advancements

Santos Limited reported a strong financial and operational performance for the third quarter of 2025, with a free cash flow of approximately $300 million and a year-to-date production of 65.4 mmboe. The company achieved significant milestones, including the commencement of the production phase at Barossa LNG and advancements in the Pikka phase 1 project, which is expected to boost production by 30% by 2027. Strategic partnerships and successful project completions highlight Santos’ focus on operational excellence and sustainable growth, positioning it well for future shareholder returns.

Santos Limited Announces CFO Transition

Santos Limited announced the resignation of its Chief Financial Officer, Ms. Sherry Duhe, who played a pivotal role in cost reduction and business improvements. Mr. Lachlan Harris, with extensive experience in finance roles at Santos, has been appointed as Acting CFO, ensuring continuity in leadership and financial strategy.

Santos Limited Announces Cessation of Share Acquisition Rights

Santos Limited announced the cessation of 317,237 share acquisition rights due to the lapse of conditional rights, as the conditions were not met or became incapable of being satisfied. This development may impact the company’s capital structure and could have implications for stakeholders, reflecting on the company’s operational adjustments and strategic positioning in the market.

Santos Limited Announces Cessation of Share Acquisition Rights

Santos Limited announced the cessation of 41,572 share acquisition rights under the ASX code STOAZ due to unmet conditions, effective from July 11, 2025. This development may impact the company’s capital structure and could have implications for stakeholders monitoring the company’s securities performance.

Santos Limited Issues Over One Million Share Acquisition Rights

Santos Limited announced the issuance of over one million share acquisition rights under an employee incentive scheme. This strategic move aims to enhance employee engagement and align their interests with company performance, potentially strengthening Santos’ market position and operational effectiveness.

Santos Limited Director Increases Stake with Additional Share Purchase

Santos Limited announced a change in the director’s interest, with Musje Moses Werror acquiring an additional 2,950 fully paid ordinary shares through an on-market purchase. This change reflects a strategic move by the director to increase his stake in the company, potentially signaling confidence in the company’s future performance and stability, which could positively impact stakeholder sentiment.

Santos Limited Director Increases Shareholding

Santos Limited has announced a change in the director’s interest, with John Gerard Lydon acquiring an additional 36,724 ordinary shares through an indirect interest via Nautilus Beach Pty Ltd. This acquisition increases his total holdings to 130,205 shares, reflecting a strategic move that could influence the company’s governance and shareholder dynamics.

Santos Limited: XRG Consortium Withdraws Acquisition Proposal

Santos Limited announced that the XRG Consortium, led by a subsidiary of Abu Dhabi National Oil Company, has withdrawn its indicative proposal to acquire Santos. Despite the withdrawal, the consortium maintains a positive view of Santos. The decision was influenced by delays in agreeing on the Scheme Implementation Agreement and concerns over regulatory risks and risk allocation. Santos remains focused on its strategy to deliver shareholder value through its ongoing projects and expects a substantial increase in production and cash flow in the coming years.

Santos Signs MOU with Orica for Narrabri Gas Supply

Santos Limited has signed a non-binding memorandum of understanding with Orica for a potential domestic gas supply from the Narrabri Gas Project to Orica’s east coast manufacturing network. This agreement highlights the strong market interest in Narrabri gas, with Santos aiming to provide up to 15 PJ per year for up to 10 years, contingent on a final investment decision and regulatory approvals. The project is seen as a strategic initiative to enhance gas supply competition and reliability for east coast energy users.

Santos Limited Updates 2025 Interim Dividend Exchange Rates

Santos Limited has updated its previous announcement regarding the exchange rates used for converting the US dollar 2025 interim dividend into payment currencies. This update pertains to the six-month period ending on June 30, 2025, and reflects the company’s ongoing financial operations and commitment to transparency with its stakeholders.