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.
