SM Energy Update - Dec 31

[dan_s]

SM Energy (SM) is another strong candidate for promotion to the Sweet 16, but I will wait until I see their 2019 cap ex budget. SM's 2018 capex program exceeded cash flow from operations, which is a big negative with the Wall Street Gang right now, no matter how good their well results and production growth are.

> SM is trading at $15.48 today
> First Call's target price is $30.74
> In the last 3 months, 11 ranked analysts set 12-month price targets for SM that range from $22 to $40. The average price target among the analysts is $32.22.
> SM's production mix is approximately 42% crude oil, 38% natural gas and 20% NGLs.
> Higher gas and NGL prices in Q4 + they have a lot of production hedged, should soften the blow of low oil prices in the second half of Q4.
> Strong balance sheet with plenty of liquidity
> "Rock Star" area in the Permian Basin continues to report outstanding well results