The Santos Ltd (ASX: STO) share price has been a strong performer in 2022.
Thanks to rising oil prices, the energy producer's shares have smashed the market with a 22% gain.
As a comparison, the S&P/ASX 200 Index (ASX: XJO) is down 6.2% over the same period.
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Can the Santos share price keep rising?
The good news for investors is that one leading broker still sees plenty of upside ahead for the Santos share price.
According to a recent note out of Morgans, its analysts have retained their add rating with a slightly trimmed price target of $10.00 on the company's shares.
Based on the current Santos share price of $8.08, this implies potential upside of approximately 24% for investors over the next 12 months.
Why is Morgans bullish?
Morgans is bullish on Santos due to its positive growth outlook and its diversified earnings base.
The broker believes this leaves the company well-placed to benefit from a sector recovery and suspects that the Santos share price could continue to re-rate to higher multiples in the coming months.
Morgans commented:
We expect the resilience of STO's growth profile and diversified earnings base see it best placed to outperform against a backdrop of a broader sector recovery. While pre-FEED, we see Dorado as likely to provide attractive growth for STO, while its recent acquisition increasing its stake in Darwin LNG has increased our confidence in Barossa's development. PNG growth meanwhile remains a riskier proposition, with the government adamant it will keep a larger share of economic rents while operator Exxon has significantly deferred growth plans across its global portfolio.
All in all, this could make Santos' shares a top option for investors that are looking for exposure to sky high oil prices.
