JPMorgan upgrades SM Energy to Overweight higher oil prices

JPMorgan analyst Zach Parham upgraded SM Energy (SM) to Overweight from Neutral with a price target of $40, up from $37, after resuming coverage following a period of restriction. The company’s completed acquisition of Civitas has bolstered its acreage position in the Midland Basin and added new operational areas in the Delaware and DJ basins, the analyst tells investors in a research note. JPMorgan says that with oil prices moving significantly higher due to the Iran conflict, SM’s deleveraging timeline will be pulled forward. The firm sees potential for SM to “quickly deleverage” and shift more free cash flow towards cash return.