SM Energy Company (SM)
NYSE:SM
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SM Energy
(NYSE:SM)
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Rating:67Neutral
Price Target:
$36.00
â–²(38.62% Upside)
Action:Reiterated
Date:05/23/26
The score reflects a mixed financial backdrop (sharp TTM margin compression, higher leverage, and negative free cash flow) offset by a strong and improving operational/strategic outlook from the latest earnings call (raised production guidance with steady CapEx, rapid synergy capture, and ongoing deleveraging). Technicals are supportive with price above key moving averages, while valuation is tempered by a negative P/E despite a moderate dividend yield.
Positive Factors
Merger Synergy Capture
Rapid, above‑plan synergy realization materially lowers the combined company’s cost base and lifts adjusted margins and cash flow. A $300M+ initial capture and a $1.8B PV target indicate durable structural savings that support reinvestment, deleveraging and shareholder returns.
Negative Factors
Negative Free Cash Flow
Persistent negative free cash flow, even with strong operating cash flow, indicates heavy investment, integration cash use, or working capital pressure. If sustained, it limits organic deleveraging, reduces ability to fund buybacks/dividends, and raises reliance on asset sales or capital markets.
Read all positive and negative factors
Positive Factors
Negative Factors
Merger Synergy Capture
Rapid, above‑plan synergy realization materially lowers the combined company’s cost base and lifts adjusted margins and cash flow. A $300M+ initial capture and a $1.8B PV target indicate durable structural savings that support reinvestment, deleveraging and shareholder returns.
Read all positive factors
SM Energy (SM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.97B
Dividend Yield4.38%
Average Volume (3M)4.45M
Price to Earnings (P/E)―
Beta (1Y)0.63
Revenue Growth27.35%
EPS Growth-66.88%
CountryUS
Employees663
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)1.15
Shares Outstanding239,748,700
10 Day Avg. Volume4,720,518
30 Day Avg. Volume4,445,472
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 Cap1.28
Enterprise Value/Revenue2.68
Enterprise Value/Gross Profit5.95
Enterprise Value/Ebitda4.95
Forecast
1Y Price Target
$37.64Price Target Upside44.92% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
EPS Forecast (FY)7.23
Revenue Forecast (FY)$7.19B
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 its operated and non-operated wells. Revenue is generated based on (1) production volumes and (2) realized commodity prices, which reflect benchmark mar...
SM Energy Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 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
62
Positive
Balance Sheet
55
Neutral
Cash Flow
48
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.79B | 3.15B | 2.67B | 2.36B | 3.35B | 2.60B |
| Gross Profit | 1.71B | 1.00B | 1.23B | 1.11B | 2.12B | 1.32B |
| EBITDA | 2.06B | 2.21B | 1.92B | 1.70B | 2.12B | 980.91M |
| Net Income | 130.73M | 648.00M | 770.29M | 817.88M | 1.11B | 36.23M |
Balance Sheet | ||||||
| Total Assets | 19.14B | 9.25B | 8.58B | 6.38B | 5.72B | 5.23B |
| Cash, Cash Equivalents and Short-Term Investments | 449.00M | 368.00M | 0.00 | 616.16M | 445.00M | 332.72M |
| Total Debt | 6.74B | 2.30B | 2.84B | 1.62B | 1.61B | 2.11B |
| Total Liabilities | 12.28B | 4.44B | 4.34B | 2.76B | 2.63B | 3.17B |
| Stockholders Equity | 6.87B | 4.81B | 4.24B | 3.62B | 3.09B | 2.06B |
Cash Flow | ||||||
| Free Cash Flow | -225.60M | 573.00M | -1.63B | 475.05M | 806.47M | 481.61M |
| Operating Cash Flow | 2.17B | 2.01B | 1.78B | 1.57B | 1.69B | 1.16B |
| Investing Cash Flow | -1.67B | -1.47B | -3.41B | -1.10B | -880.26M | -667.24M |
| Financing Cash Flow | -51.83M | -175.00M | 1.01B | -304.54M | -693.86M | -159.83M |
SM Energy Technical Analysis
Positive
25.97
Price Trends
30.00
Positive
25.36
Positive
23.81
Positive
Market Momentum
1.32
Negative
62.67
Neutral
67.67
Neutral
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 25.97 is below the 20-day moving average (MA) of 31.36, below the 50-day MA of 30.00, and above the 200-day MA of 23.81, indicating a bullish trend. The MACD of 1.32 indicates Negative momentum. The RSI at 62.67 is Neutral, neither overbought nor oversold. The STOCH value of 67.67 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
70 Outperform | $3.22B | 5.92 | 32.67% | ― | 49.58% | ― | |
67 Neutral | $7.97B | -2.68 | 2.49% | 4.38% | 27.35% | -66.88% | |
67 Neutral | $2.95B | 60.48 | 26.86% | 9.94% | 54.86% | 37.42% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
58 Neutral | $4.33B | -2.64 | -6.06% | 5.78% | 18.27% | -67.80% | |
54 Neutral | $2.50B | -1.38 | -29.09% | 8.18% | -6.81% | -197.47% |
* Energy Sector Average
SM
SM Energy
33.77
11.42
51.08%
NOG
Northern Oil And Gas
23.75
-1.44
-5.70%
BSM
Black Stone Minerals
13.82
1.48
12.00%
GPOR
Gulfport Energy
178.22
-16.46
-8.45%
CRGY
Crescent Energy Company Class A
13.20
5.04
61.73%
SM Energy Corporate Events
Executive/Board ChangesShareholder Meetings
SM Energy Updates Executive Pay and Governance Framework
Positive
May 22, 2026
On May 21, 2026, SM Energy’s board amended and restated a change-of-control executive severance agreement for President and CEO Elizabeth A. McDonald, effective January 30, 2026, significantly detailing cash and benefits she would receive up...
Business Operations and Strategy
SM Energy Redeems 2026 Senior Notes, Simplifies Capital Structure
Positive
May 12, 2026
On May 11, 2026, SM Energy Company redeemed the full $400 million aggregate principal amount of its 5.000% Senior Notes due 2026, paying accrued and unpaid interest as required under its governing indenture. With this transaction, the company full...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
SM Energy Closes Maverick Basin Asset Sale, Reduces Debt
Positive
Apr 30, 2026
On April 30, 2026, SM Energy closed the previously announced sale of roughly 61,000 net acres of producing and non‑producing assets in its southern Maverick Basin position in Webb County, Texas, for a cash purchase price of $950 million, gen...
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...
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.