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Santos Limited
(Sydney:STO)
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Rating:65Neutral
Price Target:
AU$7.50
▼(-1.96% Downside)
Action:Reiterated
Date:03/26/26
The score is held back primarily by weakening financial trajectory (declining revenues, softer returns, and pressured free cash flow). Offsetting this are supportive technical momentum (price above major moving averages, positive MACD) and a constructive earnings-call outlook emphasizing low costs, strong liquidity, and a pathway to stronger free cash flow as major projects ramp, with valuation and yield adding moderate support.
Positive Factors
Low unit production costs
Santos's decade-low unit cost ($6.78/boe) and sub-$7 target are durable advantages: lower opex raises margin resilience across cycles, reduces breakeven, supports stronger free cash flow at lower commodity prices, and gives a sustainable competitive cost position versus peers.
Negative Factors
Multi-year revenue decline
Sustained top-line declines, including a ~24% drop in 2025, indicate weakening earnings power. Persistently lower revenue pressures margins, reduces cash available for reinvestment or returns, compresses ROE, and raises reliance on successful project ramps to restore long-term growth.
Read all positive and negative factors
Positive Factors
Negative Factors
Low unit production costs
Santos's decade-low unit cost ($6.78/boe) and sub-$7 target are durable advantages: lower opex raises margin resilience across cycles, reduces breakeven, supports stronger free cash flow at lower commodity prices, and gives a sustainable competitive cost position versus peers.
Read all positive factors
Santos Limited (STO) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$24.69B
Dividend Yield6%
Average Volume (3M)9.42M
Price to Earnings (P/E)20.4
Beta (1Y)0.29
Revenue Growth-5.72%
EPS Growth-31.55%
CountryAU
Employees4,028
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.26
Shares Outstanding3,247,773,000
10 Day Avg. Volume10,558,329
30 Day Avg. Volume9,424,773
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$8.38Price Target Upside9.59% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)0.62
Revenue Forecast (FY)AU$7.12B
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 extracted from its operated and non-operated fields. Its core revenue streams include: (1) Natural gas sales: Santos sells natural gas under long-term contracts and shorter-term ar...
Santos Limited Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 19, 2026
Earnings Call Sentiment Positive
The call emphasized substantial operational and financial strengths: record-low unit costs, strong cash generation, robust liquidity, successful delivery of Barossa and other execution highlights, and progress across CCS and growth portfolios. Challenges cited were primarily near-term and operational (Barossa commissioning issues, regional inflation-driven project cost pressure, Cooper Basin flood impacts) and appraisal/longer-term development risks (Beetaloo economics). Management presented clear mitigation actions, conservative guidance (all-in breakeven target of $45–$50/boe), and a pathway to stronger free cash flow sensitivity once Barossa and Pikka reach plateau, indicating the positives meaningfully outweigh the negatives.Positive Updates
Strong cash generation and profitability
Free cash flow from operations of $1.8 billion, EBITDAX of $3.4 billion and underlying profit after tax of $898 million; product sales revenue over $4.9 billion and gross profit margin of 33.7%.
Negative Updates
Lower commodity prices and impact on earnings
Underlying profit is lower than prior year, attributed to lower commodity prices and a higher effective income tax rate; management noted lower realized prices contributed to reduced earnings.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong cash generation and profitability
Free cash flow from operations of $1.8 billion, EBITDAX of $3.4 billion and underlying profit after tax of $898 million; product sales revenue over $4.9 billion and gross profit margin of 33.7%.
Read all positive updates
Company Guidance
Management's guidance and targets emphasized strong 2025 delivery and conservative forward planning: 2025 free cash flow from operations was $1.8bn, EBITDAX $3.4bn and underlying profit ~$898m, with gearing at 26.9% (21.5% excl. leases), liquidity ≈$4.3bn and no debt maturities in 2026; unit production cost hit a decade-low of $6.78/boe, 2025 free‑cash‑flow breakeven was $27.43/bbl (all‑in $58.90/bbl) and Santos is targeting all‑in breakeven of $45–50/bbl and < $7/boe opex going forward; production was 87.7 mmboe in 2025 with a near‑term ambition of 100–120 mmboe and Barossa+Pikka expected to lift production ~25% by 2027; the Board declared a final dividend of $0.0103/share (48% of H2 FCF) and total dividends $0.0237/share (43% of FCF), the company targets an annual savings run‑rate of $150m (≈$50m achieved in 2025), FCF sensitivity rising from ~$400m to $550–600m per $10 Brent once Barossa/Pikka are ramped, a 10% headcount reduction from 2024 levels in 2026, and a 15–25% gearing range with a policy to return at least 60% of cash in excess of all‑in breakeven to shareholders.Santos Limited Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
60
Neutral
Cash Flow
52
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 5.26B | 5.40B | 5.89B | 7.79B | 4.71B |
| Gross Profit | 1.62B | 3.70B | 2.22B | 5.64B | 1.59B |
| EBITDA | 3.46B | 3.67B | 3.97B | 4.97B | 2.65B |
| Net Income | 846.53M | 1.22B | 1.42B | 2.11B | 658.00M |
Balance Sheet | |||||
| Total Assets | 32.05B | 29.63B | 29.76B | 28.86B | 31.02B |
| Cash, Cash Equivalents and Short-Term Investments | 1.72B | 1.86B | 2.28B | 2.46B | 2.97B |
| Total Debt | 7.54B | 6.69B | 6.16B | 5.52B | 8.02B |
| Total Liabilities | 16.37B | 14.10B | 14.48B | 14.01B | 16.40B |
| Stockholders Equity | 15.68B | 15.54B | 15.28B | 14.84B | 13.57B |
Cash Flow | |||||
| Free Cash Flow | 642.66M | 449.00M | 889.00M | 2.15B | 1.07B |
| Operating Cash Flow | 2.65B | 2.85B | 3.26B | 4.56B | 2.27B |
| Investing Cash Flow | -1.99B | -2.69B | -2.90B | -1.67B | -137.00M |
| Financing Cash Flow | -818.58M | -206.00M | -860.00M | -3.40B | -481.00M |
Santos Limited Technical Analysis
Positive
7.65
Price Trends
7.64
Negative
7.60
Positive
6.96
Positive
Market Momentum
-0.06
Negative
57.13
Neutral
93.27
Negative
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 7.65 is above the 20-day moving average (MA) of 7.28, above the 50-day MA of 7.64, and above the 200-day MA of 6.96, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 57.13 is Neutral, neither overbought nor oversold. The STOCH value of 93.27 is Negative, 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 |
|---|---|---|---|---|---|---|---|
72 Outperform | AU$55.17B | 14.03 | 7.67% | 7.16% | -5.14% | -22.20% | |
67 Neutral | AU$78.38M | 9.81 | 2.32% | 6.72% | 30.05% | 614.71% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
65 Neutral | AU$24.69B | 20.38 | 5.26% | 6.00% | -5.72% | -31.55% | |
63 Neutral | AU$1.01B | 5.96 | 12.44% | 4.74% | -17.21% | 8.09% | |
60 Neutral | AU$1.99B | -17.22 | -3.66% | 7.72% | 11.40% | -225.74% | |
42 Neutral | AU$421.88M | -16.57 | -14.19% | ― | ― | 25.55% |
* Energy Sector Average
AU:STO
Santos Limited
7.62
0.27
3.73%
AU:BPT
Beach Energy
0.88
-0.40
-31.53%
AU:BTL
Empire Energy Group Limited
0.28
0.08
36.59%
AU:KAR
Karoon Energy Ltd
1.42
-0.38
-21.30%
AU:ECH
New Zealand Oil & Gas Limited
0.35
<0.01
0.57%
AU:WDS
Woodside Energy Group
29.05
6.62
29.51%
Santos Limited Corporate Events
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...
Santos approves high-return Agogo tie-in project to boost PNG LNG output
May 11, 2026
Santos Limited has approved a final investment decision for the Agogo Production Facility Tie-In Project in Papua New Guinea, connecting the Agogo facility to the PNG LNG gas pipeline via a new 19-kilometre pipeline, two new wells and production m...
Santos Reports Lapse of 241,097 Share Acquisition Rights
May 1, 2026
Santos Limited has notified the market of the lapse of 241,097 share acquisition rights, identified under ASX security code STOAY, after the conditions attached to these rights were not met or became incapable of being satisfied as of 1 April 2026...
Santos Issues 665,283 Unquoted Share Rights Under Employee Incentive Plan
May 1, 2026
Santos Limited has notified the market of the issue of 665,283 unquoted share acquisition rights under its employee incentive scheme, with an issue date of 24 April 2026. The new rights, which are not intended to be quoted on the ASX, reflect the ...
Santos Issues New Unquoted Rights Under Employee Incentive Scheme
May 1, 2026
Santos Limited has issued 4,806 unquoted share acquisition rights under its employee incentive scheme, with the securities recorded as being issued on 24 April 2026. The move reflects the company’s continued use of equity-based remuneration ...
Santos Reports Lapse of 2,268 Share Acquisition Rights Under Sharematch Plan
May 1, 2026
Santos Limited has reported the cessation of 2,268 share acquisition rights under its Sharematch plan, after the conditional rights lapsed when their vesting conditions were not met or became incapable of being satisfied. The change slightly reduc...
Santos Issues New Unquoted Share Rights Under Employee Incentive Scheme
May 1, 2026
Santos Limited has notified the market of the issuance of 4,940 unquoted share acquisition rights under its ShareMatch employee incentive scheme. These securities, identified under the ASX code STOAZ, were issued on 2 April 2026 and are not intend...
Santos Issues 9,517 New Shares Following Conversion of Unquoted Securities
May 1, 2026
Santos Limited has notified the market of the issue of 9,517 ordinary fully paid shares following the exercise or conversion of previously unquoted securities. The new shares, issued on 9 April 2026, reflect the conversion of options or other conv...
Santos boosts CEO equity stake with fresh long-term incentive grant
Apr 27, 2026
Santos has disclosed a change in managing director Kevin Gallagher’s interests following the allocation of 665,283 share acquisition rights under the company’s long-term incentive plan. The rights were granted at no cash cost after sha...
Santos Investors Back Board, Pay and CEO Incentives at 2026 AGM
Apr 16, 2026
Santos shareholders endorsed all resolutions at the 2026 annual general meeting, including the re-election of directors Janine McArdle and Vickki McFadden by strong majorities, underscoring broad investor support for the existing board. The remune...
Santos Signals Step-Change in Output and Cash Flow After Investment Phase
Apr 16, 2026
Santos reported that 2025 was a defining year, highlighting the strength of its strategy, disciplined operating model and workforce in delivering energy to customers across Australia and the Asia-Pacific region. The company has completed a phase o...
Santos Reports Lapse of 3,929 Share Acquisition Rights
Apr 8, 2026
Santos Limited has reported the cessation of 3,929 share acquisition rights under its security code STOAY, following the lapse of conditional rights that could not be satisfied. The lapse, effective 19 March 2026, slightly reduces the pool of pote...
Santos Issues 2.5 Million Unquoted Share Rights Under Incentive Scheme
Apr 8, 2026
Santos Limited has notified the market of the issue of 2,498,834 unquoted share acquisition rights under its employee incentive scheme, effective 20 February 2026. The new securities, which will not be quoted on the ASX, reflect the company’...
Santos Reports Lapse of Share Acquisition Rights Under SHAREMATCH Plan
Apr 8, 2026
Santos Limited has notified the market of the cessation of 964 share acquisition rights under its SHAREMATCH plan, listed as STOAZ on the ASX. The rights lapsed on 19 March 2026 after the conditions attached to these conditional rights were not sa...
Santos issues 5,503 new ordinary shares from conversion of unquoted securities
Apr 8, 2026
Santos Limited has notified the market of the issue of 5,503 ordinary fully paid shares following the conversion or exercise of previously unquoted securities. The new shares, issued on 20 March 2026, reflect a minor equity increase under existing...
Santos Confirms Major Alaska Oil Upside as Pikka First Oil Nears
Apr 8, 2026
Santos has successfully completed the Quokka-1 appraisal well in Alaska’s North Slope, confirming a high-quality Nanushuk reservoir with strong flow rates and supporting the potential for a two-drill-site development comparable in scale to t...
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.