Citi sees capex easing for Australia's Santos as Pikka, Barossa projects advance
Citi expects capital expenditure (capex) to ease for Santos STO.AX in calendar year 2026, driving free cash flow (FCF) higher, as its Pikka and Barossa projects near completion
Brokerage estimates about $250 million in gross capex savings at the oil and gas giant's Barossa project
A 30% beat in FCF from operations doesn't translate to a 30% higher interim dividend, all else being equal - Citi
Company reported $620 million in Q2 FCF
Brokerage forecasts an interim dividend of 10 Australian cents per share and a final dividend of 12 Australian cents per share
Last year, company declared an interim dividend of 13 U.S. cents and a final dividend of 10.3 U.S. cents
Twelve analysts on average rate the stock "buy"; with a median price target of A$8.4, according to data compiled by LSEG
YTD, STO up 16.3%, as of last close
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