Loading...
Back to narrative

SM: Merger Talks And Share Repurchases Will Drive Future Shareholder Upside

Merger Prospects And Rising Oil Output Will Drive Future Gains

SM logo
SM
AnalystConsensusTarget
Not Invested
Published 29 Aug 2024

Update shared on 10 Dec 2025

Fair value Decreased 1.23%
Previous
n/a
n/a
AnalystConsensusTarget's Fair Value
n/a
Loading
1Y
-51.6%
7D
-2.8%

Analysts have modestly reduced their price target on SM Energy from 33.92 dollars to 33.50 dollars. This reflects slightly lower assumptions for revenue growth and profit margins, even as valuation multiples edge higher.

What's in the News

  • SM Energy issued new production guidance for the fourth quarter of 2025, targeting approximately 206 to 212 Mboe/d with 52 to 53% oil, reflecting a stable near term output outlook (company guidance).
  • The company updated its full year 2025 guidance to 207 to 208 Mboe/d with 53 to 54% oil, narrowing the range at the midpoint and signaling increased confidence in its production plan (company guidance).
  • From July 1 to September 30, 2025, SM Energy repurchased 444,705 shares for 12.12 million dollars, completing the tranche announced on June 27, 2024 and reducing its share count by 0.39% (company disclosure).
  • Civitas Resources is reportedly in merger of equals talks with SM Energy in a potential deal valued at least 14 billion dollars including debt, with both companies declining to comment on the discussions (Bloomberg report).

Valuation Changes

  • Fair Value Estimate lowered slightly from 33.92 dollars to 33.50 dollars, reflecting a modestly more conservative intrinsic value assessment.
  • Discount Rate reduced marginally from 8.13 percent to 8.01 percent, implying a slightly lower required return on equity.
  • Revenue Growth forecast trimmed from approximately 52.11 percent to 50.95 percent, indicating a small downward revision to top line expectations.
  • Net Profit Margin assumption reduced from about 12.91 percent to 11.78 percent, signaling a modestly more cautious view on future profitability.
  • Future P/E multiple increased from 3.40 times to 3.75 times, suggesting a higher valuation being applied to projected earnings despite slightly softer fundamentals.

Have other thoughts on SM Energy?

Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.

Create Narrative

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.