UBS 01/10/2009 3 Downgrade to Neutral from Buy $16.24 6.8% With the WTI oil price averaging 4.8% above UBS forecasts, the analysts have adjusted their forecasts to reflect the Sept actual price, while leaving long term forecasts unchanged.
They have also raised their long term LNG price forecasts due to recent Pacific Basin and Asian pricing.
In addition, UBS has also lifted its AUD/USD forecasts to be in line with the end of the Sept quarter rate of 87c.
This sees Santos downgraded to Neutral and its target cut by 29c to $16.24.
Deutsche Bank 07/09/2009 1 Buy $20.60 35.5% Marking to market oil prices and exchange rates for July and August sees a reduced AUD denominated oil price. Deutsche notes Santos is adversely affected by the lower oil price forecasts, resulting in declines to CY09 EPS.
There are minor revisions to EPS forecasts, while the price target slips to $20.60 (from $20.65) on an adjustment of the broker's valuation.
Citi 24/08/2009 1 Buy, Medium Risk $20.90 37.5% Santos steamed in with a first-half profit well ahead of expectations (23% above Citi's forecasts).
It maintains its Buy rating and $20.90 target price but has cut earnings estimates 3.6% for FY09, 8.1% for FY10 and 6.8% for FY11 to reflect a higher tax rate and exploration costs and lower production forecasts.
BA-Merrill Lynch 21/08/2009 1 Buy, Medium Risk $17.04 12.1% The broker notes the net profit result was above consensus and $84mn above its own numbers. However, at an underlying earnings level, things were a bit closer.
Merrills notes that the main drivers of the result were lower financing costs and lower petroleum resource rent tax (PRRT).
While maintaining a production forecast that is at the low end on consensus, the broker still boosts its underlying 2010-11 net profit forecasts by 16% and 12% respectively due to an expectation of increased interest capitalisation and even lower PRRT.
On top of that, the broker thinks the market is still to fully price in the value of the group's LNG projects. The Buy is maintained and the target rises to $17.04 (from $16.63).
JP Morgan 21/08/2009 1 Overweight $16.60 9.2% Target $16.60 (was $16.00). Interim earnings were well above the broker's forecast given lower production costs and on the news it lifts its full year numbers and accordingly its price target.
With the stock the best value in the sector in the broker's view it retains its Overweight rating.
RBS Australia 21/08/2009 1 Buy $16.50 8.6% Interim earnings matched the broker's forecast but were above consensus, while it sees the decision to not underwrite the dividend as evidence management is comfortable with the group's financing position.
Post the result the broker continues to see the stock as the top pick in the sector and it makes no change to its Buy rating.
Macquarie 21/08/2009 1 Outperform $17.00 11.8% Macquarie notes the headline result beat consensus by 52%, but the outperformance was entirely non-operational and largely non-cash, points out Macquarie.
Cash flow paints a better picture, notes the broker, and this came in tells 2.7% below forecast and is a truer reflection of underlying performance.
Macquarie raises its 2009 and 2010 net profit forecasts by 53% and 8%, but again, this is merely a function non-cash and non-operational benefits.
Still, the Outperform call is maintained and the target price rises 30c to $17.30, with the broker looking for looking for progress on the GLNG and PNG LNG projects as they approach final investment decisions in the coming months.
Credit Suisse 21/08/2009 3 Neutral $16.50 8.6% Interim earnings were better than consensus but in the broker's view it represents a poor profit margin.
The broker notes the stock is not an earnings driven story at present as performance remains dependent on delivering the next phase of LNG growth and so post the result it retains its Neutral rating.
Aspect Huntley 28/07/2009 2 Downgrade to Accumulate from Buy - - Update database.
STO Price at posting:
$15.20 Sentiment: None Disclosure: Held
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