Morningstar

Santos Ltd STO

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Stock XASX Rating as of
A$6.84 −0.08 (1.16%)
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As of Delayed Price Closed

Company Report

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Santos Earnings: Operating Discipline Sees Robust Cash Flow Continue

Mark Taylor

Australia’s second-largest oil and gas firm no-moat Santos reported an 18% decline in first-half 2024 underlying net profit after tax to USD 654 million. This was 7% below our USD 703 million expectations, though we read no longer-term implication—our midcycle estimates are intact. Higher-than-anticipated depreciation caused the miss, with PNG assets attracting additional due to the removal of held-for-sale recognition. Net operating cash flow was ahead of our expectations, up 29% to USD 1.8 billion.

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Price vs Fair Value

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STO is trading at a 643% premium.
Price
A$6.84
Fair Value
A$57.50
Uncertainty
High
1-Star Price
A$49.17
5-Star Price
A$5.70
Economic Moat
Xhm
Capital Allocation
Typcbqjbz

Bulls Say, Bears Say

Bulls

Santos is a beneficiary of continued global economic growth and increased demand for energy. Aside from coal, gas has been the fastest-growing primary energy segment globally. The traded gas segment is expanding faster still.

Bears

Santos committed to substantial LNG capital expenditures, which will see the balance sheet geared in the medium term.

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News

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Trading Information

Previous Close Price
A$6.92
Day Range
A$6.75–6.94
52-Week Range
A$6.57–8.18
Bid/Ask
A$6.83 / A$6.85
Market Cap
A$22.21 Bil
Volume/Avg
15.0 Mil / 8.1 Mil

Key Statistics

Price/Earnings (Normalized)
11.28
Price/Sales
2.62
Dividend Yield (Trailing)
6.72%
Dividend Yield (Forward)
6.72%
Total Yield
6.84%

Company Profile

Santos was founded in 1954. The company's name is an acronym for South Australia Northern Territory Oil Search. The first Cooper Basin gas discovery came in 1963, with initial supplies in 1969. Santos became a major enterprise, though over-reliance on the Cooper Basin, along with the Moomba field's inexorable decline, saw it struggle to maintain relevance in the first decade of the 21st century. However, the stage was set for a renaissance via conversion of coal seam gas into LNG in Queensland and conventional gas to LNG in PNG.
Sector
Energy
Industry
Oil & Gas E&P
Stock Style Box
Large Value
Total Number of Employees
2,946
Website
https://www.santos.com

Competitors

Valuation

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Metric
STO
WDS
SHELL
Price/Earnings (Normalized)
 11.289.437.54
Price/Book Value
 0.960.881.08
Price/Sales
 2.622.430.69
Price/Cash Flow
 4.784.774.52
Price/Earnings
STO
WDS
SHELL

Financial Strength

Metric
STO
WDS
SHELL
Quick Ratio
 0.910.800.97
Current Ratio
 1.111.241.41
Interest Coverage
 4.7310.287.08
Quick Ratio
STO
WDS
SHELL

Profitability

Metric
STO
WDS
SHELL
Return on Assets (Normalized)
 4.36%5.47%6.78%
Return on Equity (Normalized)
 8.41%8.71%14.74%
Return on Invested Capital (Normalized)
 4.86%7.28%10.60%
Return on Assets
STO
WDS
SHELL

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