SM Energy (SM) Valuation Update - Apr 4

[dan_s]

At the time of this post SM was trading at $52.06. It is near the top of the Sweet 16 gainers YTD.

I have updated my forecast for my new oil & gas price deck. My valuation of SM increases by $3 to $65.

TipRanks' current price target is $47.45, but none of the price targets submitted to TipRanks have been updated since March 8. Oil prices are much higher today.

I've been following SM for close to a decade. They've done a wonderful job of restructuring their debt and deleveraging the balance sheet. I have increased the multiple of CFPS used to value it from 4.25 to 4.50, which I believe is still conservative for a company of this quality.

DENVER, March 26, 2024 /PRNewswire/ -- SM Energy Company (NYSE: SM) today announces that its Board of Directors approved the quarterly cash dividend of $0.18 per share of common stock outstanding. The dividend will be paid on May 3, 2024, to stockholders of record as of the close of business on April 19, 2024.

Now that the balance sheet is in good shape, I expect SM to accelerate their stock buybacks.