SM Energy upgraded to Buy from Neutral at Seaport Research

Seaport Research upgraded SM Energy to Buy from Neutral with a $50 price target. The primary focus for the exploration and production group in 2024 will be on continued consolidation, which Seaport expects to continue at a “similarly swift pace,” the analyst tells investors in a research note. The firm says the group “remains at a relatively reasonable valuation,” trading at 10.4% free cash flow yield in 2024. It thinks SM is well positioned with its inventory in the Midland Basin and in South Texas to generate positive returns. The company has inventory capable of sustaining its current pace of drilling for several years, says Seaport.