Woodside and Santos dividends set to jump as UBS bets on higher-for-longer oil
UBS raised its oil and LNG price forecasts due to the prolonged US-Iran conflict, expecting Brent to average US$100/barrel in Q4. This led to higher earnings and dividend forecasts for Woodside (WDS) and Santos (STO). UBS upgraded WDS's 2026 and 2027 earnings by 26% and 32%, with dividends up 49% in 2026. STO's earnings were raised by 27% for both years, with dividends up 87% in 2026. UBS kept WDS as Neutral and STO as Buy.
How this was made
The 30-second read
Why it matters
The analyst upgrades provide fresh, material information that could move the stocks in the short term.
Market read
UBS's upgraded forecasts for two major Australian energy firms could trigger buying interest and lift the sector.
What to watch
Potential supply‑side disruptions or geopolitical escalation could further boost prices beyond UBS forecasts.
Background
UBS revised its oil, LNG and price forecasts amid the ongoing US‑Iran conflict, leading to higher earnings and dividend outlooks for Woodside and Santos.
Ticker impact
UBS raised Woodside's 2026 earnings forecast by 26% and lifted its dividend outlook 49%, also increasing the price target to $31.10.
upward pressure as investors price in higher earnings and dividend expectations
UBS's substantial forecast lift and new price target suggest near‑term upside, especially with the stock trading near $31.96.
Market effects
Higher oil and LNG price expectations could lift the broader Australian energy sector.
Australian market may see a rally in energy stocks as UBS upgrades two major players.
Elevated Brent forecasts signal continued strength in global energy markets.
Counterpoint
If oil prices soften sooner than UBS expects, the upgrades may be overstated, limiting upside.
Key entities
- companyWoodside Energy Ltd
Australian oil and gas producer, ticker WDS.
- companySantos Ltd
Australian energy company, ticker STO.
- analystUBS
Investment bank providing the upgraded forecasts.