STO – UBS rates the stock as Neutral

By Broker News | More Articles by Broker News

Santos will acquire ConocoPhillips’ northern Australian assets for $1.39bn. The transaction will be funded from free cash flow and $750m in new debt facilities as well as a 25% equity sell-down of Bayu-Undan and Darwin LNG.

The transaction increases forecast production by 12% and UBS estimates the acquisition will deliver 9% upside to operating earnings (EBITDA) in 2020. Neutral rating maintained. Target rises to $8.10 from $7.20.

Sector: Energy.

Target price is $8.10.Current Price is $7.76. Difference: $0.34 – (brackets indicate current price is over target). If STO meets the UBS target it will return approximately 4% (excluding dividends, fees and charges – negative figures indicate an expected loss).

 

Broker News

About Broker News

FNArena's Australian Broker Call, is your daily news report on the latest recommendation, valuation, forecast and opinions recently published by Stockbrokers.

View more articles by Broker News →