RBC Capital Markets has upgraded Santos from “perform” to “outperform,” despite the recent collapse of a takeover bid by a consortium. The failed takeover last week had sent Santos shares tumbling, but analyst Gordon Ramsay remains optimistic about the energy giant’s prospects. Santos is an Australian energy company focused on exploration, development, production, and marketing of oil and gas. The company supplies energy to homes, businesses and major industries across Australia and Asia.
Ramsay anticipates that Santos’ new capital management policy will lead to higher returns starting in 2027. He also projects a 34 per cent increase in the company’s production, driven in part by new Barossa DLNG sales. Ramsay has set a share price target for Santos at $7.75.
“We think our Santos 2026 forecast multiple of 3.5 times looks relatively attractive in comparison to our Australian average of 6.1 times,” Ramsay stated. He noted that his estimates are based on a “relatively conservative” Brent oil price forecast of US$56.25 per barrel, which is more than US$10 below its current trading value. This conservative approach suggests potential for further upside if oil prices remain elevated.
