$SM

Energy Stocks Poised for Gains as Oil, Gas Outlook Improves, UBS Says

UBS maintained its bullish outlook for oil and natural gas, saying it expects 2027 prices to top what the current futures price would suggest even as volatility prompted it to stress-test energy stocks under multiple price scenarios, the bank said in a note on Tuesday.The analysis looked at oil prices ranging from $55-$65 per barrel for Brent crude and corresponding WTI prices of about $51-$61/bbl, along with natural gas prices between $2.75 and $4.25 per million British thermal units.UBS assumed companies would keep spending and production levels unchanged across all scenarios.UBS said current share prices for US oil and gas producers imply investors are expecting WTI crude prices in the low $60s/bbl and natural gas prices of about $3.50/MMBtu in 2027.In a scenario where Brent crude averages $75/bbl and natural gas averages $3.75/MMBtu, UBS believes the sector appears undervalued. Based on historical valuation levels, the bank estimates energy stocks could have over 20% upside.The bank also said energy company valuations are highly sensitive to changes in commodity prices. A $10/bbl move in oil prices and a $0.50 change in natural gas prices would have a significant impact on companies' cash flow and valuations.UBS added that if oil prices fall below $60/bbl and natural gas prices below $3/MMBtu many producers would likely reduce drilling activity and production.Despite higher oil prices since the recent conflict began, energy stocks have lagged the broader market. The S&P 500 Energy Index has gained 8% but has underperformed the broader S&P 500 by about 3 percentage points.Front-month WTI crude prices have risen 22%, while contracts for 2027 delivery are up 15%. Longer-dated natural gas prices, however, have fallen 10%.Among the companies UBS follows, SM Energy (SM) and Chord Energy (CHRD) have posted the strongest gains since the conflict began, while Liberty Energy (LBRT), Comstock Resources (CRK) and Gulfport Energy (GPOR) have been the weakest performers.Smaller and mid-sized oil producers have generally outperformed their larger peers, UBS said.UBS maintained its preferred exploration and production stocks as Ovintiv (OVV), Devon Energy (DVN) and Antero Resources (AR), while naming National Energy Services Reunited (NESR) as its top pick among oilfield services companies.Price: $29.40, Change: $-0.90, Percent Change: -2.97%

Higher Oil Prices Ease SM Energy, Crescent Energy Debt Concerns, Shift Focus to Execution, UBS Says

Higher crude prices have eased investor concerns over debt reduction at SM Energy (SM) and Crescent Energy (CRGY), shifting attention toward acquisition integration and operational execution, UBS said in a Monday note.UBS said its small- and mid-cap oil and gas coverage climbed about 9% on average in July, rebounding from a 21% average decline in the second quarter as West Texas Intermediate crude rose more than 20% amid Middle East tensions.The bank said the 2027 West Texas Intermediate strip has risen more than 8% to above $70 per barrel, strengthening cash flows and supporting deleveraging across much of the sector.Investor feedback following UBS' initiation of coverage on SM Energy and Crescent Energy centered on whether both companies could continue reducing debt if oil prices weaken. UBS said each company can still achieve that goal.UBS said sustained oil-price strength would likely shift investor attention toward execution on recent acquisitions. The bank expects second-quarter earnings to provide updates on operational improvements and synergy gains at both companies.Investors expressed confidence in SM Energy's management team and its plans to increase shareholder returns. Most questions focused on whether the company can lower debt enough to support higher capital returns in a weaker oil-price environment.UBS estimated SM Energy reaches cash-flow neutrality in fiscal 2027 before and after dividends at West Texas Intermediate prices of $49.30/bbl and $52.70/bbl, well below the current 2027 strip of near $71/bbl.Investors also questioned SM Energy's drilling inventory after the Civitas (CIVI) acquisition. UBS estimated reserve life at about 8.6 years following the South Texas sale, below the preferred 10-year level but broadly competitive with peers.UBS said additional appraisal across the Midland Basin, including the Woodford-Barnett interval and Wolfcamp D formation, could expand SM Energy's resource base. The bank also highlighted an 11% increase in 2025 Uinta proved reserves.Investors also sought UBS' view on Crescent Energy's acquisition strategy. The bank expects the company to eventually expand in the Texas Delaware Basin but believes management remains focused on integrating the Vital Energy (VTLE) acquisition and capturing synergies.UBS said investors viewed Crescent Energy's royalty business favorably and supported its estimate of $2.50 to $3.50 per share in equity value for Crescent Royalties.UBS said investors expressed fewer concerns about Crescent Energy's debt than SM Energy's despite both companies carrying leverage of about 2x at the end of the second quarter.Crescent Energy's projected debt of $5.0 billion, versus $6.5 billion for SM Energy, alongside first-quarter synergy capture of more than 120% of target, supports further debt reduction, the bank said.UBS lowered Crescent Energy's projected gas realizations to reflect weaker Waha pricing during the second quarter while raising expected oil realizations.The bank expects SM Energy to expand reserves primarily through discoveries and extensions as it develops acreage across its portfolio, rather than pursuing additional acquisitions to build inventory.UBS said SM Energy continues drilling appraisal and step-out wells across its Midland Basin position and plans to advance secondary bench testing on inherited CIVI acreage, particularly in the Wolfcamp D formation.UBS said SM Energy's integration of its Uinta assets demonstrates its ability to expand reserves organically.After acquiring the assets in 2024, the company increased proved reserves to 110.9 million barrels of oil equivalent at year-end 2025, including 37.3 million boe from discoveries, extensions and positive revisions.The bank expects similar execution on the acquired Permian assets to support future reserve growth and extend inventory.Price: $29.54, Change: $-0.76, Percent Change: -2.51%

Oil Stocks Rise as Middle East Tensions Lift Crude Ahead of Earnings Season, RBC Says

Shares of US oil and gas producers gained over the past week as renewed tensions between Israel and Iran pushed crude prices higher ahead of the Q2 earnings season, RBC Capital Markets analyst Scott Hanold said in a Thursday note.Oil prices climbed to around $80 per barrel for the US benchmark West Texas Intermediate after US President Donald Trump pledged further action against Iran following renewed military strikes.The renewed geopolitical tensions came as the US Strategic Petroleum Reserve fell for the consecutive week to 316.5 million barrels, while inventories at the Cushing, Oklahoma, delivery hub rose above the 20-million-barrel level considered the minimum for efficient operations.Despite the jump in oil prices, trading activity across energy markets remained subdued, Hanold said.Oil-focused exploration and production companies outperformed their natural gas peers over the past week. Shares of oil-weighted producers rose about 3%, while gas-focused companies slipped 1%.The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) gained 4% as crude prices rose about 10%, while US natural gas benchmark Henry Hub prices fell 4%.Investor attention is now shifting toward the upcoming US exploration and production earnings season, with analysts reporting increased discussions around company strategy and capital allocation after limited interest from generalist investors during much of the second quarter.Among the companies drawing the most attention are Expand Energy (EXE), where investors are awaiting the appointment of a new chief executive and Devon Energy (DVN) over potential asset sales.Other companies include EOG Resources' (EOG) exploration activities in the UAE, Matador Resources' (MTDR) efforts to unlock value from its midstream assets, California Resources' (CRC) strategic initiatives, and EQT's (EQT) growth plans.Analysts said investors are also focused on the potential for mergers and acquisitions, free cash flow allocation and the outlook for US natural gas markets, with EOG, Matador, SM Energy (SM) and EQT emerging as favored names heading into earnings.Price: $168.11, Change: $+1.67, Percent Change: +1.00%

Roth Capital Partners Upgrades SM Energy to Buy From Neutral, Adjusts PT to $32 From $30

SM Energy (SM) has an average rating of overweight and mean price target of $42.20, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)

SM Energy Seen Beating Oil Production Expectations, TPH Energy Says

SM Energy (SM) could produce more oil than previously expected through the rest of the year, even as recent asset transactions complicate comparisons in the company's near-term financial results, TPH Energy Research analyst Oliver Huang said in a Friday note.Huang said the independent US oil and gas producer appears positioned to outperform both company guidance and Wall Street expectations on oil production in the coming quarters.The forecast comes after SM Energy completed several portfolio changes, including a partial acquisition tied to Civitas Resources earlier this year and the sale of certain natural gas-focused South Texas assets at the end of April.Despite those moving pieces, TPH estimates Q1 oil production at about 238,500 barrels per day, above the company's guidance range of 228,000 b/d to 235,000 b/d and slightly ahead of broader analyst expectations.For the second half of 2026, the firm expects oil output to average roughly 240,000 b/d, modestly above both company guidance and consensus estimates.TPH also expects SM Energy's capital spending to land toward the high end of its projected annual range as the company continues development activity.The research firm said additional asset sales aimed at reducing debt could serve as a catalyst for the shares. SM Energy is viewed by investors as a company with significant exposure to oil prices because of its relatively high leverage and large crude oil production base, making the stock more sensitive to swings in oil markets.The company's shares have outperformed since oil prices strengthened amid geopolitical tensions and war-related disruptions, supported by what TPH described as a strong first-quarter performance.TPH maintained a "Hold" rating on the stock with a $38 price target.Price: $30.53, Change: $-0.63, Percent Change: -2.02%

SM Energy to Pay Quarterly Dividend of $0.22 per Share, Payable June 22 to Shareholders of Record June 8

Raymond James Upgrades SM Energy to Outperform From Underperform, Price Target is $55

SM Energy (SM) has an average rating of overweight and mean price target of $41.73, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)

SM Energy Gains Momentum on Civitas Merger, RBC Says

SM Energy (SM) is seeing its integration of Civitas execute ahead of plan, with stronger production and a favorable commodity price environment helping the company reduce debt and accelerate share buybacks, RBC Capital Markets said in a Friday note.RBC said SM Energy produced 371 thousand barrels of oil equivalent per day, or Mboe/d, in Q1, just two months operating as a combined company. That came in 6% above the midpoint of guidance.Capital spending was 12% below plan at $672 million, while management raised its full-year production midpoint to about 420 Mboe/d, the firm said.RBC said the faster-than-expected integration supports a higher free cash flow profile as one-time integration costs begin to fade.Analysts also noted SM Energy has "an attractive value proposition" and a significant upside potential with a positive rate of change.RBC maintained its sector perform rating on SM Energy and $40 price target.Price: $33.40, Change: $+0.81, Percent Change: +2.49%

SM Energy Q1 Production Jumps Following Civitas Merger, Raises 2026 Outlook

SM Energy Company (SM) reported Q1 earnings on Wednesday, showing net production volumes of 33.4 million barrels of oil equivalent, up from 17.8 mmboe a year earlier following the Civitas Resources merger.Oil production volumes increased to 17.1 mmbbl for the quarter ended March 31, up from 9.3 mmbbl a year earlier.Natural gas production climbed to 72.4 billion cubic feet for the quarter from 36.4 Bcf a year earlier.Natural gas liquids production rose to 4.2 mmbbl for Q1, compared with 2.4 mmbbl a year earlier.SM Energy completed its merger with Civitas Resources on Jan. 30, 2026, adding Permian and DJ Basin assets.SM Energy raised its full-year 2026 production guidance to 150 mmboe to 157 mmboe and an average daily total production of 410,000 boe per day to 430,000 boe/d.SM Energy maintained its 2026 capital expenditure plan at $2.65 billion to $2.85 billion and expects to drill about 245 net wells during the year.SM Energy completed the $950 million sale of certain South Texas assets on Apr. 30 and plans to use about $900 million of net proceeds to retire outstanding 2026 senior notes.Price: $27.50, Change: $-1.08, Percent Change: -3.78%

SM Energy Q1 Adjusted Earnings Fall, Revenue Rises

SM Energy (SM) reported Q1 adjusted earnings late Wednesday of $1.55 per diluted share, down from $1.76 a year earlier.Analysts polled by FactSet expected $1.12.Revenue for the three months ended March 31 was $1.48 billion, up from $845 million a year earlier.Analysts surveyed by FactSet expected $1.42 billion.