Top broker tips Santos (ASX:STO) share price to climb 17%

This broker sees a lot of value in the Santos share price…

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The Santos Ltd (ASX: STO) share price has run out of steam on Thursday.

At the time of writing, the energy producer's shares are down 2% to $7.32.

Despite this, Santos shares are still up an impressive 13% since this time last month.

Can the Santos share price keep rising?

The good news for investors is that one leading broker believes the Santos share price could run a lot higher.

According to a recent note out of Morgans, its analysts have an add rating and $8.55 price target on the energy producer's shares.

Based on the current Santos share price, this implies potential upside of 17% over the next 12 months.

In addition to this, the broker is forecasting a fully franked 13.3 cents per share dividend in FY 2022. If we add this into the equation, this brings the potential return to a total of almost 19% for investors.

Why is the broker positive on Santos?

There are a few reasons why Morgans is bullish on the Santos share price.

These include its growth profile and diversified earnings base. The broker also sees some very big positives from its proposed merger with fellow energy producer Oil Search Ltd (ASX: OSH).

Morgans explained:

We expect the resilience of STO's growth profile and diversified earnings base see it best placed to outperform against a backdrop of a continuing broader sector recovery. STO remains our top preference amongst our large-cap energy universe.

With early indications supportive of our view that material synergies and enhanced growth plans will result from the OSH merger. While in good shape, we expect STO to continue gaining investor support as it executes on the opportunistic OSH merger.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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