The Santos Ltd (ASX: STO) share price has rewarded investors handsomely so far in 2026.
The energy producer's shares have climbed around 37% since the beginning of the year and are now trading at approximately $8.41, close to a 52-week high.
After such a strong run, I think it is worth asking whether there is still enough value left for investors buying today.
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Earnings could move higher
The first thing I would look at is where Santos' earnings are expected to go from here.
Santos has substantial exposure to natural gas and liquefied natural gas (LNG), which gives the business opportunities to benefit from continued energy demand across Australia and Asia.
According to consensus estimates, earnings per share are forecast to come in at 60.2 cents in FY26 before increasing to 75.3 cents in FY27 and 77.9 cents in FY28.
Of course, earnings from an energy producer will never be completely predictable. Commodity prices can move quickly, while large projects bring execution and cost risks.
Still, if analysts are close to the mark, the earnings outlook makes today's share price considerably easier to justify.
What are investors paying?
At $8.41, Santos shares are trading on a P/E ratio of roughly 14 times forecast FY26 earnings.
The valuation drops to around 11 times FY27 earnings and remains close to that level based on the FY28 forecast.
I think that looks quite reasonable.
Santos is a cyclical energy producer, so I would not expect it to command the type of earnings multiple investors might pay for a highly predictable defensive or technology business.
But an earnings multiple of around 11 times does not look demanding if profits rise as currently expected.
Dividends add to the case
There could also be a meaningful income stream for shareholders.
Consensus forecasts point to dividends per share of 41.7 cents in FY26, 49.4 cents in FY27, and 64.4 cents in FY28.
At today's share price, those estimates imply forward dividend yields of roughly 5%, 5.9%, and 7.7%, respectively.
I would be cautious about assuming the FY28 payment will definitely arrive. Energy earnings can change significantly with commodity prices, and dividends can move with them.
Even so, the forecasts suggest investors may receive a substantial amount of cash while they wait for the longer-term investment case to play out.
What could go wrong?
There is genuine uncertainty to consider.
Oil and LNG prices can weaken, development projects can cost more than expected, and Santos operates in a capital-intensive industry where investment decisions can have consequences for many years.
That means I would want a margin of safety rather than buying the shares purely because forecast earnings are rising.
At around 11 times FY27 earnings, I think there is still one.
Foolish takeaway
The Santos share price has already had an excellent 2026, but I do not think the rally has exhausted the opportunity.
At $8.41, I would describe the shares as good value rather than obviously cheap.
Forecast earnings growth brings the forward valuation down quickly, while the potential dividend income adds another reason to be interested.
For investors comfortable with commodity-price volatility and the risks that come with large energy projects, I think Santos shares are still a buy at current levels.
