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SM Energy
(NYSE:SM)
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Rating:71Outperform
Price Target:
$46.00
â–²(28.92% Upside)
Action:Reiterated
Date:09/06/26
The score is driven primarily by solid operating performance but constrained by thin and volatile free cash flow and higher leverage. Technicals are bullish (price above major DMAs with positive MACD), valuation is favorable (low P/E and a 2.36% yield), and corporate actions/results reinforce balance-sheet improvement via note redemptions and a raised production outlook.
Positive Factors
Strong revenue growth and profitability
The combination of 45% TTM revenue growth, healthy operating margins, and approximately $1.00 billion of net income indicates strong recent execution. If operating performance remains resilient, this earnings base can support reinvestment, debt service, and continued development of the company’s resource portfolio.
Negative Factors
Elevated and rising leverage
Debt approaching the level of equity indicates a materially leveraged capital structure, while the increase from prior years points to reduced financial flexibility. If operating cash flows weaken, the company may have less capacity to fund drilling, absorb volatility, or pursue strategic opportunities without additional financing.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong revenue growth and profitability
The combination of 45% TTM revenue growth, healthy operating margins, and approximately $1.00 billion of net income indicates strong recent execution. If operating performance remains resilient, this earnings base can support reinvestment, debt service, and continued development of the company’s resource portfolio.
Read all positive factors
SM Energy (SM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.96B
Dividend Yield2.28%
Average Volume (3M)3.67M
Price to Earnings (P/E)9.7
Beta (1Y)0.22
Revenue Growth75.39%
EPS Growth-28.23%
CountryUS
Employees1,241
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)3.87
Shares Outstanding237,854,060
10 Day Avg. Volume2,923,134
30 Day Avg. Volume3,669,886
Financial Highlights & Ratios
PEG Ratio-0.21
Price to Book (P/B)0.45
Price to Sales (P/S)0.68
P/FCF Ratio3.75
Enterprise Value/Market Cap1.41
Enterprise Value/Revenue2.30
Enterprise Value/Gross Profit3.74
Enterprise Value/Ebitda3.56
Forecast
1Y Price Target
$42.86Price Target Upside20.12% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
EPS Forecast (FY)7.58
Revenue Forecast (FY)$7.68B
SM Energy Business Overview & Revenue Model
Company Description
SM Energy Company is an independent firm dedicated to the exploration, development, acquisition, and production of oil, natural gas, and natural gas liquids. Its operations are exclusively concentrated within the state of Texas. As of February 24,...
How the Company Makes Money
SM Energy primarily makes money by producing and selling hydrocarbons—crude oil, natural gas, and NGLs—generated from wells it drills and operates (and, in some cases, from non-operated working interests). Revenue is recognized from product sales ...
SM Energy Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Nov 03, 2026
Earnings Call Sentiment Positive
The call conveyed a strongly positive operational and strategic narrative: rapid and above‑plan synergy capture, production beating guidance and an upgraded full‑year production midpoint, meaningful debt reduction and credit upgrades, and multiple basin‑level efficiency gains. Near‑term negatives were limited to one‑time integration cash costs (~$180M), modest adjusted free cash flow in Q1 ($20M) driven by those costs, and GAAP volatility from hedge mark‑to‑market adjustments. Management emphasized capital discipline and returning capital via buybacks as leverage improves. Overall, highlights significantly outweigh the lowlights.Positive Updates
Merger Integration and Synergy Outperformance
Closed the Civitas merger Jan 30 and captured approximately $300 million of merger synergies in ~100 days, raising the year-end synergy target to $375 million (nearly 2x the original target). Management estimates a present value of synergies of ~ $1.8 billion, up from prior $1.0–$1.5 billion.
Negative Updates
Modest Adjusted Free Cash Flow in Q1
Adjusted free cash flow was only $20 million in Q1, constrained by approximately $180 million of one‑time integration and transaction cash costs incurred in the quarter.
Read all updates
Q1-2026 Updates
Positive
Negative
Merger Integration and Synergy Outperformance
Closed the Civitas merger Jan 30 and captured approximately $300 million of merger synergies in ~100 days, raising the year-end synergy target to $375 million (nearly 2x the original target). Management estimates a present value of synergies of ~ $1.8 billion, up from prior $1.0–$1.5 billion.
Read all positive updates
Company Guidance
SM raised its 2026 production outlook while holding CapEx steady: full‑year BOE production midpoint was increased from 410,000 to 420,000 BOE/day (oil midpoint from 221,000 to 225,000 bbls/day), full‑year capital guidance remains $2.65–$2.85 billion, and management expects a second‑half run rate of ~430,000 BOE/day and ~238,000 bbls/day of oil; Q1 results included production of 371,000 BOE/day (190,000 bbls oil/day), capital of $672 million, adjusted EBITDAX of $970 million, adjusted net income of $309 million ($1.55/sh), and adjusted free cash flow of $20 million despite ~$180 million of one‑time integration costs; merger synergies realized are ~ $300 million with a year‑end target of $375 million (PV ~ $1.8 billion), South Texas proceeds were ~ $900 million applied to debt, absolute debt cut by ~ $700 million since January with pro‑forma leverage in the low‑1x area, a $5 billion borrowing base was reaffirmed, Uinta cash production margin is nearly $40/bbl, completion efficiencies improved (Permian +4% vs. 2025, DJ simul‑frac +25% vs. zipper, South Texas +6%), and the company is maintaining a disciplined hedging posture (~50% rolling protection) while planning to commence buybacks in Q2 as free cash flow and leverage permit.SM Energy Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
62
Positive
Cash Flow
45
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.51B | 3.15B | 2.67B | 2.36B | 3.35B | 2.60B |
| Gross Profit | 3.39B | 1.00B | 1.23B | 1.11B | 2.12B | 1.32B |
| EBITDA | 3.56B | 2.21B | 1.92B | 1.70B | 2.12B | 980.91M |
| Net Income | 1.00B | 648.00M | 770.29M | 817.88M | 1.11B | 36.23M |
Balance Sheet | ||||||
| Total Assets | 18.86B | 9.25B | 8.58B | 6.38B | 5.72B | 5.23B |
| Cash, Cash Equivalents and Short-Term Investments | 620.00M | 368.00M | 0.00 | 616.16M | 445.00M | 332.72M |
| Total Debt | 7.04B | 2.85B | 2.84B | 1.62B | 1.61B | 2.11B |
| Total Liabilities | 11.04B | 4.44B | 4.34B | 2.76B | 2.63B | 3.17B |
| Stockholders Equity | 7.81B | 4.81B | 4.24B | 3.62B | 3.09B | 2.06B |
Cash Flow | ||||||
| Free Cash Flow | -37.54M | 573.00M | -1.63B | 475.05M | 806.47M | 481.61M |
| Operating Cash Flow | 2.70B | 2.01B | 1.78B | 1.57B | 1.69B | 1.16B |
| Investing Cash Flow | -1.11B | -1.47B | -3.41B | -1.10B | -880.26M | -667.24M |
| Financing Cash Flow | -1.07B | -175.00M | 1.01B | -304.54M | -693.86M | -159.83M |
SM Energy Technical Analysis
Positive
35.68
Price Trends
35.25
Positive
32.62
Positive
28.60
Positive
Market Momentum
0.23
Negative
60.60
Neutral
90.39
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SM, the sentiment is Positive. The current price of 35.68 is above the 20-day moving average (MA) of 35.66, above the 50-day MA of 35.25, and above the 200-day MA of 28.60, indicating a bullish trend. The MACD of 0.23 indicates Negative momentum. The RSI at 60.60 is Neutral, neither overbought nor oversold. The STOCH value of 90.39 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SM.
SM Energy Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $9.68B | 11.38 | 19.30% | 0.95% | 16.84% | 82.31% | |
77 Outperform | $5.80B | 10.63 | 21.10% | 2.74% | 11.35% | 18.91% | |
74 Outperform | $6.82B | 9.45 | 12.76% | 2.76% | 1.84% | -14.76% | |
72 Outperform | $7.91B | 9.66 | 10.42% | 3.67% | 19.23% | 268.81% | |
71 Outperform | $8.96B | 9.74 | 16.53% | 2.32% | 75.39% | -28.23% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
65 Neutral | $4.75B | -40.24 | -3.60% | 3.06% | 2.33% | -117.79% |
* Energy Sector Average
SM
SM Energy
37.69
15.51
69.94%
MTDR
Matador Resources
55.11
12.97
30.79%
RRC
Range Resources
41.42
4.81
13.15%
MGY
Magnolia Oil & Gas
24.46
1.75
7.70%
CRC
California Resources Corp
53.52
5.18
10.71%
CHRD
Chord Energy
144.57
55.77
62.81%
SM Energy Corporate Events
Business Operations and Strategy
SM Energy Redeems 2027 Senior Notes, Strengthens Balance Sheet
Positive
Sep 4, 2026
On September 4, 2026, SM Energy Company redeemed the entire $416,791,000 aggregate principal amount of its 6.625% Senior Notes due 2027, along with accrued and unpaid interest, in line with the governing indenture agreements. On the same date, the...
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresM&A Transactions
SM Energy posts strong Q2 2026 results, outlook raised
Positive
Aug 5, 2026
On August 5, 2026, SM Energy reported strong second quarter 2026 results, highlighting record operating cash flow of about $1.1 billion, adjusted free cash flow of $467 million, and average net daily production of roughly 440 MBoe/d, including 230...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.