Citi raises Santos PT, sees Pikka disruption as temporary

By Reuters News

** Citi maintains its "buy" rating on Santos STO.AX and increases its target price by 2% to A$9.80 per share, cites increased confidence and a higher risk-weighting for Papua LNG

** Says temporary production disruption at Pikka does not alter its investment thesis, which remains focused on higher shareholder returns in CY27 through the company's new capital management framework

** "As production ramps up and oil prices hover around US$110/bbl, STO offers significant leverage to a stronger commodity price environment" — Citi

** September-quarter production of 26.3 mmboe missed Citi and Visible Alpha estimates by 4% and 2%, respectively, due to curtailed output at Pikka

** Brokerage says CY26 production and sales guidance was modestly reduced as lower Pikka output reflects temporary reservoir pressure maintenance and water injection activities

** Citi keeps CY26 and CY27 core NPAT forecasts broadly unchanged

** Stock up nearly 50% YTD, as of last close

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