Santos Ltd (ASX: STO) shares are edging lower today.
Shares in the S&P/ASX 200 Index (ASX: XJO) energy stock closed yesterday trading for $6.32. In afternoon trade on Wednesday, shares are changing hands for $6.31, down 0.1%.
For some context, the ASX 200 is down 0.8% at this same time following this morning's shock inflation report from the ABS.
Taking a step back, Santos shares are down 8.1% over the past year, though that doesn't include the two Santos dividends paid over the full year. At the current share price, the ASX 200 energy stock trades on a partly franked 5.8% dividend yield.
Looking to the year ahead, however, MPC Markets' Jonathan Tacadena questions the company's ability to generate value for shareholders (courtesy of The Bull).
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Santos shares: Buy, sell, or hold?
"Shares in the energy giant were punished after the XRG consortium withdrew its US$30 billion takeover bid in September, just days before the expected decision date," said Tacadena, who has a sell recommendation on Santos shares.
"The shares have fallen from $7.65 on September 17 to trade at $6.47 on October 23," he said.
Tacadena added:
The failed takeover deal impacted shareholder sentiment, raising questions about the company's stand-alone prospects and its ability to generate value without a major merger or acquisition.
Then there are the recent high-level management issues.
"On October 14, the company announced the resignation of its chief financial officer, which, in our view, adds to instability," Tacadena said.
He concluded, "In the absence of another takeover bid amid potentially weaker energy prices, we expect the company's shares to remain under pressure."
What's the latest from the ASX 200 oil and gas producer?
Santos shares closed up 0.8% on 16 October following the release of the company's September quarter update.
Highlights for the three months to 30 September included the production of 21.3 million barrels of oil equivalent (mmboe). Sales revenue came in at US$1.1 billion, which helped Santos generate US$300 million in free cash flow.
The company also reported on significant progress at its two major growth projects, Barossa LNG offshore Western Australia, and Pikka Phase 1 in Alaska.
And Santos shares closed higher on the day, despite management lowering full-year production guidance to between 89 million barrels of oil equivalent (mmboe) and 91 mmboe, down from prior guidance of 90 mmboe to 95 mmboe.
The downgrade was partly driven by flooding in the Cooper Basin during the quarter.
