I have updated my forecast model for SM Energy. It will be posted to the EPG website this evening.
Cash Flow from Operations per share
First Call's Forecast / My Forecast
2015: $13.92 / $13.34
2016: $10.01 / $7.95
2017: $10.74 / $12.13
SM can easily keep production flat in 2016 and live within cash flow from operations, which will be approximately $550 million.
SM Energy (SM)
SM Energy (SM)
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: SM Energy (SM)
Why do you think your fair value on sm is more than twice first call's?
Re: SM Energy (SM)
Impossible to know the answer to that question for sure, but I do know the current share prices has an impact on the First Call price target since it does move up and down with the share price a bit. Some firms may restrict their price targets to 2X the current price for example. Also, I think there is a perception that SM's Eagle Ford acreage is not very good. However, they continue to get outstanding results that are equal to those in the Tier One leasehold.
I have not been very impressed with SM's investor relations effort. I have begged them to come speak to our group in Houston. Jennifer Samuels is their IR Manager. I called her yesterday and she did not return my call. If you don't return calls from a group with ~500 members, who do you call?
When I talked to Jennifer a month ago, she said they were going on the road in March to tell their story better.
BTW I do think my forecast model for SM is very conservative, as you can see from my CFPS forecast for 2016 compared to First Call's. It is actually one of the forecast models that I have the most confidence in since I have beaten it to death trying to find what I am missing. The 4th quarter production they announced last week was above what I had in the forecast.
Small-Caps do get hammered in these oil price cycles, which is why they have the most upside for us on the rebound.
SM is now trading a less than 2X 2016 CFPS, which is ridiculously low for a company of this quality. FANG is currently trading at 20X my 2016 CFPS forecast.
I have not been very impressed with SM's investor relations effort. I have begged them to come speak to our group in Houston. Jennifer Samuels is their IR Manager. I called her yesterday and she did not return my call. If you don't return calls from a group with ~500 members, who do you call?
When I talked to Jennifer a month ago, she said they were going on the road in March to tell their story better.
BTW I do think my forecast model for SM is very conservative, as you can see from my CFPS forecast for 2016 compared to First Call's. It is actually one of the forecast models that I have the most confidence in since I have beaten it to death trying to find what I am missing. The 4th quarter production they announced last week was above what I had in the forecast.
Small-Caps do get hammered in these oil price cycles, which is why they have the most upside for us on the rebound.
SM is now trading a less than 2X 2016 CFPS, which is ridiculously low for a company of this quality. FANG is currently trading at 20X my 2016 CFPS forecast.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group