SM Energy initiated with an Equal Weight at Wells Fargo

Wells Fargo analyst Hanwen Chang initiated coverage of SM Energy with an Equal Weight rating and $40 price target. The analyst says SM’s dual-basin assets offer diversification from headwinds such as local pricing blowouts, pipeline constraints, and regulatory concerns. However, the company’s relatively low valuation multiples could constrain its ability to pursue accretive transactions and/or large-scale acquisitions of public or private companies, the analyst tells investors in a research note.