SM Energy (SM) Valuation Update - Nov 1

[dan_s]

I have updated my SM Energy forecast/valuation model for their strong Q3 results and fresh guidance for Q4 2024.
My 2025 forecast is based on production of 225,000 Boepd (51% crude oil, 33% natural gas, and 16% NGLs).
I have increased my valuation multiple to 5X annualized operating CFPS because of how strong the results for 2025 look.

My valuation increases by $3 to $74/share.

TipRanks: "In the last 3 months, 12 ranked analysts set 12-month price targets for SM. The average price target among the analysts is $53.18. 4 of the analysts have updated their price targets today to $42, $54, $57 and $60."

There is obviously a wide range of oil, gas and NGL prices being used in their models.

TipRanks Consensus Forecast for 2025 shows:
Revenues of $3.3 billion (my forecast is $3.9 billion)
Net Income per share of $7.93 (my forecast is $9.40 EPS)
Operating Cash Flow per share of $18.43 (my forecast is $21.27)

SM will be devoting a lot of attention to their new core area in Utah, the Unita Basin. Early well results are outstanding with a high percentage of oil.