Global poster child? Why this fundie is bullish on the Santos share price

What might the future hold for the energy giant? We take a closer look.

| More on:
boy dressed as an eco warrior and holding a globe.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Santos share price is edging lower today 
  • However, one expert is positive about the company's future 
  • Brokers have also recently upgraded the company's share price to outperform 

The Santos Ltd (ASX: STO) share price may have upside in the future, but today the company's shares are falling.

Santos shares have dropped 0.5% and are currently swapping hands at $7.90. In comparison, the S&P/ASX 200 Index (ASX: XJO) is up 0.81% today.

Let's take a look at what the experts are saying about Santos.

What's the outlook for Santos?

Energy giant Santos could be the "poster child" for the future due to the company's "clear" decarbonisation strategies, according to one expert.

Tribeca Investment Partners partner Ben Cleary told the Australian Financial Review Santos has gone from a heavy emitter to a company that will produce a lot of carbon offsets. He said:

Those who have raced for the door, looking to divest, have all missed the woods from the trees. Santos is decarbonising and is implementing a great strategy, and they are likely to all come back and own these companies.

Cleary expressed concern about the "underinvestment in oil and gas" which is being seen "very clearly in the energy crisis that we see now". He added:

But this 2.0 approach is to invest in companies that have clear decarbonisation strategies. In my humble opinion, Santos is that company. It has to be the global poster child for this policy change and investing in the transition.

Macquarie recently upgraded the Santos share price to an "outperform" rating and has increased the price target to $10.50. That suggests a potential upside of 33% from the current price.

Oil prices

The Santos share price may be slightly down today, but it is not the only energy share price to fall. The S&P/ASX 200 Energy Index (ASX: XEJ) is sliding 0.61%. Beach Energy Ltd (ASX: BPT) shares are down 1.98%, while the Woodside Petroleum Limited (ASX: WPL) share price is down 1.4%.

International benchmark Brent Crude Oil price has descended 1.3% % to US$111.02 a barrel, while the WTI crude oil price is down 1.17% to US$104.49 a barrel, according to Bloomberg.

Santos share price snapshot

The Santos share price has gained more than 9% in the past 12 months and is steaming ahead 25% this year to date.

In contrast, S&P/ASX 200 Index (ASX: XJO) has returned nearly 10% over the past year.

In the last month, Santos shares have soared 10%, while they have climbed nearly 4% in the past week alone.

Santos has a market capitalisation of about $26.7 billion based on the current share price.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Energy Shares

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Energy Shares

Why this ASX uranium stock could rocket 100%+

Let's see why this speculative stock is being tipped to double in value by Bell Potter.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Energy Shares

Macquarie tips 23% upside for this ASX All Ords mining stock

Let's see why the broker thinks this stock could be a top buy.

Read more »

a group of three electricity workers stand smiling wearing hard hats and high visibility vests in front of an array of high voltage power equipment.
Energy Shares

Macquarie raises price target on Origin Energy shares

The broker just raised it's price target. Here's why.

Read more »

A smiling woman holds a Facebook like sign above her head.
Energy Shares

Bell Potter says this ASX 200 uranium stock is a top buy

Let's find out why the broker is feeling bullish on this stock.

Read more »

Worker on a laptop at an oil and gas pipeline.
Energy Shares

Boss Energy shares have surged 93% since April. Here's what Macquarie expects now

Boss Energy shares remain a favourite for ASX short sellers. Are they in a for a payday or headed for…

Read more »

A young man wearing glasses writes down his stock picks in his living room.
Energy Shares

3 reasons to buy this beaten down ASX 200 coal stock today

A leading expert forecasts a big potential rebound ahead for this quality ASX 200 coal stock.

Read more »

Female miner uses mobile phone at mine site
Energy Shares

Here are the latest growth forecasts for the Pilbara Minerals share price

Can investors charge up their returns with this ASX lithium share?

Read more »

An oil worker in front of a pumpjack using a tablet.
Energy Shares

Top 5 ASX 200 energy shares of FY25 amid a challenging year for sector

The energy sector was the weakest of the 11 market sectors in FY25.

Read more »