SM Energy Receives Strong Buy Rating as Analysts Predict 31.3% EPS Growth

KeyBanc's Tim Rezvan raised their price target on Sm Energy Co (NYSE: SM) by 4.8% from $62 to $65 on 2024/04/22. The analyst maintained their Strong Buy rating on the stock.

In a Q1 2024 preview note on names in their Oil & Gas (Exploration & Production) portfolio, Rezvan explained the reasoning behind the price target update. The move assumes rising oil prices, fueled by heightening geopolitical risk, flattening U.S. production, and declining U.S. refined product inventories.

However, when it comes to natural gas, the analyst expects prices to decline due to strong production, bloated inventories, and debottlenecking in the second half of 2024.

Biju Perincheril from Susquehanna also issued an update on SM on the same day. Perincheril raised their price target by 21.4%, from $42 to $51, while maintaining their Hold rating on the stock.

Currently, 83.3% of top-rated analysts rate SM as a Strong Buy or Buy, while 16.7% see it as a Hold. No analysts recommend or strongly recommend selling the stock.

Analysts forecast that SM's upcoming year will deliver earnings per share (EPS) of $9.04. If the analysts' predictions are accurate, SM's next yearly EPS will increase by 31.3% on a year-over-year basis.

Since SM's last quarterly report on 2023/12/31, the stock price has risen by 26.2%. Year-over-year, the stock is up by an impressive 72.1%. During this period, SM has outperformed the S&P 500, which has seen a growth of 21.1%.

Tim Rezvan, the KeyBanc analyst who raised the price target, is ranked in the top 19% out of 4,559 Wall Street analysts by WallStreetZen. With an average return of 5.2% and a win rate of 50.7%, Rezvan specializes in the Utilities and Energy sectors.

SM Energy Company, based in Denver, Colorado, produces oil, natural gas, and natural gas liquids in Texas. The company actively prospects and participates in joint ventures and drill-to-earn opportunities. As of February 24, 2022, SM Energy had proved reserves of 492 million barrels of oil equivalents. The company, founded in 1908, continues to be a prominent player in the energy industry.

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