Williams Capital analyst Gabriele Sorbara reiterated a Buy rating on SM Energy (SM) today and set a price target of $25. The company’s shares closed yesterday at $10.96, close to its 52-week low of $10.17.
Sorbara commented:
“We have raised our 2019 total and oil producon es mate by 3.3% and 0.6% to 129.7 Mbbls/d, respecvely. Given management’s conservave guidance history, we believe the bias is towards the upper-end of its guidance. However, the Company noted that 2H19 is impacted by shut-ins associated with offset operator compleon acvity. SM reiterate d achieving free cash flow posi ve in the second half of this year. At strip prices, we model a $12.0 million outspend in 2H19, including $4.7 million of free cash flow in 4Q19. However, in 2020, assuming similar acvity/spending levels to 2 019, we model a $201.7 million outspend at strip prices. EV/EBITDA basis, SM trades at 4.0x and 3.3x for 2019 and 2020, vs. its peers’ average mulples of 4.8x and 4.0x, respecvely.”
According to TipRanks.com, Sorbara is ranked 0 out of 5 stars with an average return of -11.8% and a 30.5% success rate. Sorbara covers the Basic Materials sector, focusing on stocks such as Jagged Peak Energy Inc, Gulfport Energy Corp, and Extraction Oil & Gas.
Currently, the analyst consensus on SM Energy is a Moderate Buy with an average price target of $21.86, which is a 99.5% upside from current levels. In a report released yesterday, Stephens also initiated coverage with a Buy rating on the stock with a $20 price target.
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SM Energy’s market cap is currently $1.23B and has a P/E ratio of 122.05. The company has a Price to Book ratio of 0.45.
Based on the recent corporate insider activity of 31 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of SM in relation to earlier this year.
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SM Energy Co. is an independent energy company, which is engages in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids. Its operations are located in South Texas and Gulf Coast, Rocky Mountain, and Permian regions. The company was founded in 1908 and is headquartered in Denver, CO.
