Morgans notes 4Q production and sales revenue for Santos beat consensus estimates. Strong production performances from the WA business and Darwin LNG outweighed misses at both PNG and the Cooper Basin.
The analyst explains that while group sales revenue was a beat, the company is less exposed to spot prices (large fixed-price gas business in WA) than peer Woodside Petroleum ((WPL)).
Morgans maintains its Add rating and suggests a large share price discount still exists with the potential for many positive catalysts in 2022. The target price rises to $9.15 from $8.65.
Sector: Energy.
Target price is $9.15.Current Price is $7.07. Difference: $2.08 – (brackets indicate current price is over target). If STO meets the Morgans target it will return approximately 23% (excluding dividends, fees and charges – negative figures indicate an expected loss).
