STO has noticeably outperformed heavyweight WDS in 2024 so far, slipping less than 9%. In a similar fashion to WDS, Santos is a play on oil/gas prices. We see no reason to start accumulating STO at this stage of its decline, but the risk/reward is improving fast. We wouldn’t be surprised to see M&A news around STO moving forward, which puts it above WDS from a “buy” perspective for MM. STO is no slouch on the dividend front, forecast to yield more than 6% over the next 12-months, although, unlike WDS, it hasn’t offered franking since 2022.
- We can see STO trading between $6.50 and $7.25 over the coming 3-6 months.
MM likes STO in the $6-$6.50
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