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Santos Limited (SSLZY)
OTHER OTC:SSLZY
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Santos
(OTC:SSLZY)
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Rating:68Neutral
Price Target:
$5.00
â–²(15.74% Upside)
The overall score reflects a mixed outlook for Santos. Strong earnings call performance and reasonable valuation are offset by financial performance concerns and bearish technical indicators. The company's operational achievements and attractive dividend yield are positive, but liquidity challenges and market momentum risks weigh on the score.
Positive Factors
Operational Achievements
Timely progress in major projects like Barossa and Pikka indicates Santos's ability to execute on strategic initiatives, enhancing future production capacity and revenue potential.
LNG Portfolio Performance
A diversified and largely contracted LNG portfolio provides stable cash flow and mitigates market volatility, supporting long-term financial stability and strategic growth.
Safety and Environmental Progress
Improved safety and emissions performance demonstrates Santos's commitment to sustainable practices, enhancing its reputation and aligning with global energy transition trends.
Negative Factors
Revenue Decline
A decline in revenue growth indicates potential challenges in market demand or operational efficiency, which could impact long-term profitability and competitive positioning.
Cash Flow Challenges
Reduced cash flow generation limits financial flexibility, potentially affecting the company's ability to invest in growth opportunities and manage debt obligations effectively.
Impact of Floods on Production
Natural disasters affecting production highlight operational vulnerabilities, potentially impacting revenue and necessitating increased investment in risk mitigation strategies.
Santos (SSLZY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$13.29B
Dividend Yield5.2%
Average Volume (3M)7.15K
Price to Earnings (P/E)13.0
Beta (1Y)0.56
Revenue Growth-7.44%
EPS Growth-19.13%
CountryUS
Employees3,958
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.16
Shares Outstanding3,247,773,000
10 Day Avg. Volume9,345
30 Day Avg. Volume7,151
Financial Highlights & Ratios
PEG Ratio-0.96
Price to Book (P/B)0.88
Price to Sales (P/S)2.52
P/FCF Ratio30.36
Enterprise Value/Market Cap1.60
Enterprise Value/Revenue4.04
Enterprise Value/Gross Profit5.97
Enterprise Value/Ebitda6.04
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Santos Business Overview & Revenue Model
Company DescriptionSantos Limited explores for, develops, produces, transports, and markets hydrocarbons for homes and businesses in Australia and the Asia Pacific. Its five principal assets are located in the Cooper Basin, Queensland and NSW, Papua New Guinea, Northern Australia and Timor-Leste, and Western Australia. The company also holds an asset in Alaska; and engages in the development of carbon capture and storage technologies. In addition, it produces natural gas, liquefied petroleum gas, ethane, methane, coal seam gas, liquefied natural gas, shale gas, and condensate, as well as oil. The company's proved plus probable reserves include 1676 million barrels of oil equivalent. Santos Limited was incorporated in 1954 and is headquartered in Adelaide, Australia.
How the Company Makes MoneySantos generates revenue primarily through the exploration, extraction, and sale of oil and gas. The company's key revenue streams include the sale of crude oil, natural gas, and LNG to domestic and international markets. Santos also benefits from long-term contracts with various customers, which provide a stable revenue base. Additionally, the company engages in joint ventures and partnerships with other energy firms, allowing for shared resources and reduced operational costs. The demand for LNG as a cleaner energy source has been a significant factor in increasing Santos's earnings, particularly in the Asia-Pacific region where they have established strategic supply agreements.
Santos Earnings Call Summary
Earnings Call Date:Aug 24, 2025
(Q2-2025)
| Next Earnings Date:Feb 25, 2026
Earnings Call Sentiment Positive
The earnings call reflects a strong operational and financial performance with significant achievements in safety and environmental management. However, challenges such as flood impacts on production and transaction delays require attention.Q2-2025 Updates
Positive Updates
Strong Financial Performance
Sales revenue of $2.6 billion generated EBITDAX of $1.8 billion, with free cash flow from operations of $1.1 billion and profit after tax of $439 million. A 46% improvement in total recordable injury rate compared to the first half of 2024.
Operational Achievements
Barossa remains on schedule with production expected shortly, and the Darwin LNG plant has achieved readiness for start-up. The Alaska project has brought first oil guidance forward to Q1 2026, with significant cost-saving innovations in drilling technologies.
LNG Portfolio Performance
Santos' diversified LNG contract mix, with 92% contracted and around 80% oil-linked between 2025 and 2029, provides flexibility and strong cash margins, commanding a premium for high heating value LNG from Barossa and PNG LNG.
Safety and Environmental Progress
Santos' safety performance is strong, with a 22% improvement in emissions intensity since the startup of Moomba CCS, which has safely and permanently stored more than 1 million tonnes of CO2 equivalent.
Negative Updates
Impact of Floods on Production
Floods in the Cooper Basin have led to a reduction in top-end production guidance for the full year to 95 million barrels of oil equivalent, affecting more than 200 wells and several upstream compressors.
Exploration and Evaluation Impairment
A one-off nonrecurring exploration and evaluation impairment of $119 million was recorded against the PNG business due to the unsuccessful Hides footwall prospect.
Potential Delays in Transaction Finalization
The exclusivity period for the potential transaction with the XRG Consortium has been extended by 4 weeks to conclude due diligence and obtain necessary approvals, indicating a delay in finalizing the deal.
Company Guidance
During the Santos Limited 2025 Half Year Results Webcast, CEO Kevin Gallagher highlighted the company's strong financial and operational performance, emphasizing a cash-generative base business and low-cost operating model. Key financial metrics included sales revenue of $2.6 billion, EBITDAX of $1.8 billion, and a profit after tax of $439 million, with a production volume of 44.1 million barrels of oil equivalent. The company reported free cash flow from operations of $1.1 billion and an interim dividend of USD 13.4 per share. Operationally, safety performance improved with a 46% reduction in total recordable injury rate compared to the previous year, and gearing remained within target at 23.7%. Gallagher also noted significant progress in major development projects, including Barossa and Pikka, projecting a 30% production increase by 2027, while maintaining a focus on shareholder returns and disciplined investment in future production growth.Santos Financial Statement Overview
Summary
Santos exhibits a mixed financial performance. Strong gross margins are offset by the absence of EBIT in 2024, raising profitability concerns. The balance sheet is solid with moderate leverage and good equity, but cash flow challenges indicate potential liquidity risks.Income Statement
The company demonstrated a fluctuating revenue with a significant drop from 2022 to 2023, followed by a decline in 2024. Gross profit margin improved in 2024 to 68.39% from 37.74% in 2023, indicating operational efficiency. However, the EBIT margin dropped to zero in 2024, raising concerns about core profitability. Net profit margin was stable at 22.65% in 2024, showing resilience despite revenue decline.70
Positive
Balance Sheet
The balance sheet shows a robust equity position with an equity ratio of 52.44% in 2024. The debt-to-equity ratio is at a moderate 0.43, suggesting manageable leverage. Return on equity was 7.88% in 2024, indicating decent returns to shareholders. The overall balance sheet reflects stability with a healthy equity base.75
Positive
Cash Flow
Free cash flow significantly declined in 2024, with a negative growth rate impacting cash reserves. The absence of operating cash flow data for 2024 limits the analysis. The free cash flow to net income ratio was 0.37 in 2023, showing limited cash generation relative to profits. The cash flow situation indicates potential liquidity challenges.55
Neutral
| 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 | 745.00M |
| 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 Technical Analysis
Negative
4.32
Price Trends
4.27
Negative
4.62
Negative
4.34
Negative
Market Momentum
-0.01
Negative
47.71
Neutral
42.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SSLZY, the sentiment is Negative. The current price of 4.32 is above the 20-day moving average (MA) of 4.22, above the 50-day MA of 4.27, and below the 200-day MA of 4.34, indicating a bearish trend. The MACD of -0.01 indicates Negative momentum. The RSI at 47.71 is Neutral, neither overbought nor oversold. The STOCH value of 42.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SSLZY.
Santos Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $23.75B | 8.90 | 18.35% | 2.91% | 11.14% | -21.32% | |
73 Outperform | $20.52B | 12.43 | 11.86% | 3.33% | 26.13% | 31.42% | |
73 Outperform | $19.87B | 41.77 | 39.37% | 0.74% | 12.48% | 6.24% | |
70 Neutral | $28.96B | 34.55 | 6.12% | 2.71% | 246.16% | 82.62% | |
68 Neutral | $13.29B | 13.03 | 6.58% | 5.20% | -7.44% | -19.13% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
61 Neutral | $10.53B | 45.56 | 2.26% | 3.22% | -8.07% | -87.88% |
* Energy Sector Average
SSLZY
Santos
4.32
0.19
4.62%
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2.32%
TPL
Texas Pacific Land
914.72
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EXE
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30.04%
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.