Raymond James has elevated its price target for SM Energy (SM, Financial) from $30 to $34, maintaining an Outperform rating on the stock. The adjustment follows a reassessment of the company's Q1 results and a favorable outlook on the commodity market. Additionally, the company's capital expenditure guidance for the second quarter was noted to be 3% lower than Raymond James's initial projections. Meanwhile, oil production volumes remain consistent with expectations, according to the firm's analysis.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 13 analysts, the average target price for SM Energy Co (SM, Financial) is $38.62 with a high estimate of $55.00 and a low estimate of $24.00. The average target implies an upside of 62.05% from the current price of $23.83. More detailed estimate data can be found on the SM Energy Co (SM) Forecast page.
Based on the consensus recommendation from 14 brokerage firms, SM Energy Co's (SM, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for SM Energy Co (SM, Financial) in one year is $50.14, suggesting a upside of 110.41% from the current price of $23.83. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the SM Energy Co (SM) Summary page.
SM Key Business Developments
Release Date: May 02, 2025
- Oil Production Increase: 30% increase in oil production planned for 2025.
- Total Production Increase: 20% increase in total production planned for 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SM Energy Co (SM, Financial) reported a 30% increase in oil production and a 20% increase in total production, marking a significant scale-up for the company.
- The integration of Uinta Basin assets has been successful, with the assets exceeding initial expectations.
- The company is generating substantial free cash flow, even at current lower oil prices, allowing for debt reduction and dividend payments.
- SM Energy Co (SM) has maintained a disciplined approach to capital allocation, prioritizing debt reduction over stock repurchases.
- The company has demonstrated operational efficiency, with innovations in drilling and completion techniques leading to improved capital efficiency.
Negative Points
- Oil prices below $60 have made the path to achieving 1 times leverage steeper, impacting financial flexibility.
- There is uncertainty regarding the timeline for reducing the number of rigs, with no specific guidance provided.
- The company faces variability in oil mix due to the timing of well completions, which could affect production forecasts.
- Higher lease operating expenses (LOE) are expected to persist, with some costs potentially being more sticky beyond this year.
- There is a lag between production and sales volumes due to transportation and revenue recognition timing, leading to discrepancies.
