Ann: Santos 2024 Second Quarter Report, page-3

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Friday, 19 July 2024

STO - SANTOS LIMITED

Macquarie rates STO as Outperform (1) - Macquarie suggests the growth profile for Santos is materially de-risking after reviewing 2Q operational results. First half free cash flow (FCF) of US$1.1bn was considered "solid" while other metrics were broadly in line with the broker's forecasts.

While the realised LNG price for the period of US$11.47/MMBtu beat the broker's US$11 forecast, it fell short of the consensus estimate.

Macquarie forecasts an unfranked dividend yield of 5.9% in 2024, followed by 4.8% in 2025.

Outperform rating retained. The broker's target eases to $8.95 from $9.00 due to higher-than-forecast cash costs, partly offset by near-term tax changes.

Target price is $8.95 Current Price is $8.00 Difference: $0.95 If STO meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges). Current consensus price target is $9.01, suggesting upside of 12.6%(ex-dividends)The company's fiscal year ends in December.

Forecast for FY24:

Macquarie forecasts a full year FY24 dividend of 47.72 cents and EPS of 76.54 cents . At the last closing share price the estimated dividend yield is 5.97%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.45. How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 69.6, implying annual growth of N/A. Current consensus DPS estimate is 33.4, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 11.5.

Forecast for FY25:

Macquarie forecasts a full year FY25 dividend of 40.56 cents and EPS of 54.12 cents . At the last closing share price the estimated dividend yield is 5.07%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.78. How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 76.1, implying annual growth of 9.3%. Current consensus DPS estimate is 34.6, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 10.5.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.Market Sentiment: 0.4All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources