Assessing Santos (ASX:STO) Valuation After Barossa Project Delivers First LNG Cargo

Simply Wall St.02-01 18:23

AdvertisementWhy Santos’ first Barossa LNG cargo matters now Santos (ASX:STO) has shipped its first liquefied natural gas cargo from the Barossa project, after years of investment and delays, with the...

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The 5 year total...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"IE00B29SXK94.USD":"FIRST SENTIER GLOBAL LISTED INFRASTRUCTURE \"I\" (USD) ACC","LU0048573561.USD":"FIDELITY AMERICA \"A\" (USD) INC","LU0251142724.SGD":"Fidelity America A-SGD","LU0122376428.USD":"贝莱德世界能源基金A2","LU0251131958.USD":"FIDELITY AMERICA \"A\" (USD) ACC","LU0345770308.USD":"NINETY ONE GSF GLOBAL STRATEGIC EQUITY \"A\" (USD) ACC","LU0345781412.USD":"NINETY ONE GSF GLOBAL NATURAL RESOURCES \"A\" (USD) INC","LNG":"Cheniere Energy","LU0345770993.USD":"NINETY ONE GSF GLOBAL STRATEGIC EQUITY \"A\" (USD) INC","LU0630314457.HKD":"NINETY ONE GSF GLOBAL NATURAL RESOURCES \"A\" (HKD) ACC","LU0368265418.SGD":"Blackrock World Energy Fund A2 SGD-H","BK4144":"石油与天然气的储存和运输","STO.AU":"SANTOS LIMITED","LU0170899867.USD":"EASTSPRING INVESTMENTS WORLD VALUE EQUITY  \"A\" (USD) ACC","BK7142":"石油与天然气的勘探与生产","BK7507":"资源股","LU0314104364.USD":"MANULIFE GF AMERICAN GROWTH \"AA\" (USD) INC","LU0742534661.SGD":"Fidelity America A-SGD (hedged)","LU2449327464.USD":"HSBC GIF GLOBAL INFRASTRUCTURE EQUITY \"AC\" (USD) ACC","LU0345780950.USD":"NINETY ONE GSF GLOBAL NATURAL RESOURCES \"A\" (USD) ACC","LU0788109394.HKD":"BGF WORLD ENERGY \"A2\" (HKDHGD) ACC","IE00B29SXL02.USD":"FIRST SENTIER GLOBAL LISTED INFRASTRUCTURE \"I\" (USD) INC"},"translate_title":"巴罗莎项目交付第一批液化天然气货物后评估桑托斯(ASX：STO)的估值","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"LNG":1.5,"STO.AU":1.5},"content_text":"AdvertisementWhy Santos’ first Barossa LNG cargo matters now Santos (ASX:STO) has shipped its first liquefied natural gas cargo from the Barossa project, after years of investment and delays, with the project reported as completed roughly six months late and on budget. See our latest analysis for Santos. The Barossa milestone lands at a time when momentum in Santos’ shares has been picking up, with a 1 month share price return of 13.61% and a year to date share price return of 13.98%. The 5 year total shareholder return of 26.10% points to a steadier long run outcome. If this LNG update has you thinking more broadly about energy, it could be worth scanning opportunities across aerospace and defense stocks as another part of the wider resources and infrastructure story. With Santos trading at A$7.01, sitting a little below an average analyst price target of A$7.38 but with an intrinsic discount estimate of around 56%, you have to ask: is there genuine value here, or is the market already banking on Barossa and future growth? Most Popular Narrative: 5% Undervalued The most followed narrative currently pegs Santos’ fair value at A$7.38, slightly above the last close of A$7.01. This puts Barossa’s first cargo into sharper context for long term expectations.  Near-term production growth is set to accelerate with the imminent ramp-up of major projects (Barossa LNG and Pikka Phase 1), positioning Santos to benefit from structurally rising global LNG and natural gas demand, especially in emerging Asia; this should boost future revenue and operating margins.  Read the complete narrative. Want to see what sits behind that modest uplift in fair value? The narrative refers to higher future earnings, firmer margins and a lower earnings multiple than today. Curious how those pieces fit together into A$7.38? Result: Fair Value of A$7.38 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, you still need to factor in the risk that large project spending, decommissioning obligations or tougher ESG rules could pressure earnings and Santos’ rating. Find out about the key risks to this Santos narrative.  Build Your Own Santos Narrative If you are not fully sold on this view or prefer to lean on your own work, you can test the numbers yourself and shape a custom thesis in minutes, Do it your way. A great starting point for your Santos research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision. Looking for more investment ideas? Do not stop at a single stock. Use the Simply Wall St Screener to spot other opportunities that match what you care about before they move without you.  Target steady income by checking out these 12 dividend stocks with yields > 3% that might help you build a more consistent cash return profile from your portfolio. Ride long term technology trends by scanning these 24 AI penny stocks that are tied to artificial intelligence themes across different industries. Hunt for potential bargains by reviewing these 875 undervalued stocks based on cash flows, where pricing is compared to underlying cash flow estimates.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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