Sm Energy Company (SM)
NYSE:SM
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SM Energy
(NYSE:SM)
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Rating:75Outperform
Price Target:
$33.00
â–²(16.28% Upside)
Action:ReiteratedDate:04/03/26
The score is driven primarily by an attractive valuation (very low P/E with a meaningful dividend) and constructive technical momentum (price above major moving averages with positive MACD). Financial performance is solid but capped by cyclicality and free-cash-flow volatility, while the latest earnings call supports the outlook with disciplined 2026 spending and deleveraging plans, tempered by near-term cadence and integration/commodity-price sensitivity.
Positive Factors
Improved liquidity and liability management
Materially stronger liquidity and an expanded borrowing base reduce near‑term refinancing risk and give the company scope to prioritize deleveraging and sustain operations through commodity cycles. This durable buffer supports scheduled maturities, funding of prioritized CapEx, and staged balance‑sheet repair without forcing asset sales under stress.
Negative Factors
Free cash flow volatility
Wide swings in free cash flow across years reflect sensitivity to commodity prices, timing of capital spending and asset transactions. This variability undermines predictability of debt reduction and shareholder returns, forcing reliance on one‑off asset sales or debt transactions in weak cycles, and complicates multi‑year planning for investors and creditors.
Read all positive and negative factors
Positive Factors
Negative Factors
Improved liquidity and liability management
Materially stronger liquidity and an expanded borrowing base reduce near‑term refinancing risk and give the company scope to prioritize deleveraging and sustain operations through commodity cycles. This durable buffer supports scheduled maturities, funding of prioritized CapEx, and staged balance‑sheet repair without forcing asset sales under stress.
Read all positive factors
SM Energy (SM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.76B
Dividend Yield4.38%
Average Volume (3M)6.67M
Price to Earnings (P/E)3.3
Beta (1Y)0.77
Revenue Growth34.93%
EPS Growth-11.85%
CountryUS
Employees663
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.83
Shares Outstanding238,359,160
10 Day Avg. Volume5,521,976
30 Day Avg. Volume6,668,436
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 Cap0.77
Enterprise Value/Revenue1.65
Enterprise Value/Gross Profit5.17
Enterprise Value/Ebitda2.10
Forecast
1Y Price Target
$34.50Price Target Upside21.56% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)6.01
Revenue Forecast (FY)$6.94B
SM Energy Business Overview & Revenue Model
Company Description
SM Energy Company, an independent energy company, engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids in the state of Texas. As of February 24, 2022, it had 492.0 million barrels of oil...
How the Company Makes Money
SM Energy makes money primarily by producing and selling crude oil, natural gas, and NGLs from wells it drills and operates (and from interests it holds in wells operated by others). Revenue is largely generated from (1) oil sales, (2) natural gas...
SM Energy Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call emphasized several strong positives — record 2025 results, material deleveraging, nearly $3 billion liquidity, meaningful near-term synergy capture from the Civitas merger, a disciplined capital plan that reduces 2026 CapEx by ~14%, a 10% dividend increase, and a clear focus on maximizing free cash flow and returning capital to shareholders. Notable near-term negatives include front-loaded 2026 CapEx and Q1 production headwinds driven by legacy Civitas timing (including an approximate 14% decline in inherited assets Sep–Jan), reporting changes due to 3-stream to 2-stream conversions that complicate year-over-year production comparisons, and a pro forma leverage profile in the mid-1s with an ~8-year inventory life that could be viewed as shorter than some peers. Overall, the positive items — particularly liquidity, synergy capture, deleveraging progress, and a concrete return-of-capital plan — outweigh the headwinds and execution risks discussed.Positive Updates
Record operational and financial performance in 2025
Delivered record operating cash flow, adjusted EBITDAX, production and oil volumes; oil constituted 53% of total production. Returned $104 million to stockholders via dividends and share repurchases.
Negative Updates
Front-loaded CapEx and first-quarter headwinds
2026 CapEx is front-loaded with higher spend in Q1 driven by the combined fleet (management entered the year with ~15 rigs then planned to decline to ~11). This creates near-term cash and production cadence headwinds versus the cleaner H2 run rate.
Read all updates
Q4-2025 Updates
Positive
Negative
Record operational and financial performance in 2025
Delivered record operating cash flow, adjusted EBITDAX, production and oil volumes; oil constituted 53% of total production. Returned $104 million to stockholders via dividends and share repurchases.
Read all positive updates
Company Guidance
SM’s 2026 guidance is built around a $60/bbl oil and $3.50/MMBtu gas price case with capital spending of $2.65–$2.85 billion (about 14% below pro‑forma 2025), roughly 45% of CapEx to the Permian and ~45% of total capital deployed in H2, with activity reset to ~11 rigs by year‑end (down ~3 from a pro‑forma avg of 14; started the year at 15); Q1 is front‑loaded (heavier spend, Q1 estimates include only two months of Civitas) and H2 volumes are expected at 420–430 MBOE/d (55% oil) as the go‑forward run rate. The plan prioritizes free cash flow to drive delevering from mid‑1x pro‑forma leverage toward the low‑1s, allocates 80% of quarterly FCF after dividends to debt reduction and 20% to buybacks, and supports a 10% increase in the fixed dividend to $0.88/year (yield just under 4%). Balance‑sheet moves include a $5.0B borrowing base, $2.5B lender commitments (nearly $3B liquidity), a $950M South Texas asset sale expected to close in Q2, plans to address near‑term bond maturities (including a $417M 2027 bond), and a Civitas synergy target of $200–$300M (already actioned $185M) with $1.0–$1.5B potential present‑value upside.SM Energy Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
68
Positive
Cash Flow
61
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.15B | 2.67B | 2.36B | 3.35B | 2.60B |
| Gross Profit | 1.00B | 1.23B | 1.11B | 2.12B | 1.32B |
| EBITDA | 2.21B | 1.92B | 1.70B | 2.12B | 980.91M |
| Net Income | 648.00M | 770.29M | 817.88M | 1.11B | 36.23M |
Balance Sheet | |||||
| Total Assets | 9.25B | 8.58B | 6.38B | 5.72B | 5.23B |
| Cash, Cash Equivalents and Short-Term Investments | 368.00M | 0.00 | 616.16M | 445.00M | 332.72M |
| Total Debt | 2.30B | 2.84B | 1.58B | 1.57B | 2.08B |
| Total Liabilities | 4.44B | 4.34B | 2.76B | 2.63B | 3.17B |
| Stockholders Equity | 4.81B | 4.24B | 3.62B | 3.09B | 2.06B |
Cash Flow | |||||
| Free Cash Flow | 573.00M | -1.63B | 475.05M | 806.47M | 481.61M |
| Operating Cash Flow | 2.01B | 1.78B | 1.57B | 1.69B | 1.16B |
| Investing Cash Flow | -1.47B | -3.41B | -1.10B | -880.26M | -667.24M |
| Financing Cash Flow | -175.00M | 1.01B | -304.54M | -693.86M | -159.83M |
SM Energy Technical Analysis
Neutral
28.38
Price Trends
25.23
Positive
21.92
Positive
23.17
Positive
Market Momentum
1.20
Positive
50.45
Neutral
22.30
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SM, the sentiment is Neutral. The current price of 28.38 is below the 20-day moving average (MA) of 29.62, above the 50-day MA of 25.23, and above the 200-day MA of 23.17, indicating a neutral trend. The MACD of 1.20 indicates Positive momentum. The RSI at 50.45 is Neutral, neither overbought nor oversold. The STOCH value of 22.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $2.99B | 9.38 | 27.16% | 9.94% | -0.75% | -29.40% | |
75 Outperform | $6.76B | 3.32 | 14.00% | 4.38% | 34.93% | -11.85% | |
71 Outperform | $3.78B | 8.86 | 22.73% | ― | 38.16% | -115.65% | |
68 Neutral | $4.18B | 15.28 | 3.06% | 5.78% | 32.31% | -122.30% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
65 Neutral | $2.82B | 54.12 | 1.69% | 8.18% | 1.51% | -78.38% |
* Energy Sector Average
SM
SM Energy
28.38
7.38
35.17%
NOG
Northern Oil And Gas
26.94
5.72
26.94%
BSM
Black Stone Minerals
14.08
1.36
10.69%
GPOR
Gulfport Energy
203.59
37.46
22.55%
CRGY
Crescent Energy Company Class A
12.74
5.23
69.62%
SM Energy Corporate Events
Business Operations and StrategyPrivate Placements and Financing
SM Energy Completes Tender Offer, Retires High-Coupon Notes
Positive
Apr 2, 2026
On April 2, 2026, SM Energy reported the expiration and final results of its cash tender offer for up to $1 billion of 8.375% senior notes due 2028, originally issued by Civitas Resources and assumed in connection with their merger. As of the Apri...
Business Operations and StrategyPrivate Placements and Financing
SM Energy Expands Tender Offer to Reduce High-Cost Debt
Positive
Mar 18, 2026
On March 18, 2026, SM Energy reported early results from its cash tender offer for 8.375% Senior Notes due 2028, originally issued by Civitas Resources and assumed following their merger. By the March 17 early tender deadline, investors had tender...
Private Placements and Financing
SM Energy Issues $1 Billion Senior Notes Offering
Neutral
Mar 9, 2026
On March 9, 2026, SM Energy Company issued and sold $1.0 billion of 6.625% senior notes due April 15, 2034, in a private offering to qualified institutional buyers and certain non-U.S. investors, with the notes guaranteed by subsidiary guarantors ...
Business Operations and StrategyPrivate Placements and Financing
SM Energy Prices $1 Billion Senior Notes Offering
Positive
Mar 5, 2026
On March 4, 2026, SM Energy priced an upsized private offering of $1.0 billion in senior notes due 2034, carrying a 6.625% coupon and issued at par. The transaction, expected to close on March 9, 2026 subject to customary conditions, is limited to...
Business Operations and StrategyFinancial DisclosuresPrivate Placements and FinancingRegulatory Filings and Compliance
SM Energy Launches Senior Notes Offering and Tender Offer
Positive
Mar 4, 2026
On March 4, 2026, SM Energy said it plans a private offering of $750 million in senior notes due 2034, marketed only to qualified institutional buyers and certain non-U.S. investors under securities law exemptions. The company intends to use proce...
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresM&A Transactions
SM Energy Posts Record 2025 Results After Civitas Merger
Positive
Feb 25, 2026
On February 25, 2026, SM Energy reported record full-year 2025 net production of 75.5 MMBoe and record operating cash flow of $2.01 billion, which helped lift adjusted EBITDAX 13% despite lower benchmark oil prices. The company generated $620 mill...
Business Operations and StrategyM&A Transactions
SM Energy Divests Maverick Basin Assets to Deleverage Balance Sheet
Positive
Feb 18, 2026
SM Energy Company has agreed to sell approximately 61,000 net acres, about 260 producing wells and related facilities in its southern Maverick Basin position in Webb County, Texas, to Caturus Energy for $950 million in cash, with the transaction e...
Business Operations and StrategyExecutive/Board ChangesM&A TransactionsPrivate Placements and FinancingShareholder Meetings
SM Energy closes Civitas merger and expands credit capacity
Positive
Jan 30, 2026
On January 30, 2026, SM Energy closed its all‑stock merger with Civitas Resources, following shareholder approval at both companies on January 27, 2026, creating a top‑10 U.S. independent oil‑focused producer with a larger, compl...
Business Operations and StrategyM&A TransactionsRegulatory Filings and ComplianceShareholder Meetings
SM Energy Shareholders Approve Transformative Merger with Civitas
Positive
Jan 27, 2026
On January 27, 2026, SM Energy and Civitas Resources reported that stockholders of both companies overwhelmingly approved all proposals required to complete their previously announced all-stock merger, clearing a major hurdle toward closing the tr...
Business Operations and StrategyExecutive/Board ChangesM&A Transactions
SM Energy announces post-merger leadership and board overhaul
Positive
Jan 26, 2026
On November 2, 2025, SM Energy Company agreed to merge with Civitas Resources through a two-step transaction under which Civitas will first become a wholly owned subsidiary and then be merged into SM Energy, prompting a significant reshaping of th...
Legal ProceedingsM&A TransactionsRegulatory Filings and ComplianceShareholder Meetings
SM Energy supplements merger disclosures amid shareholder demands
Neutral
Jan 20, 2026
SM Energy Company, which in November 2025 agreed to merge with Civitas Resources through a two-step transaction that will ultimately fold Civitas into SM Energy, has received multiple demand letters from purported stockholders since December 2025 ...
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.