KeyBanc has revised its outlook on SM Energy (SM, Financial), reducing its price target from $60 to $36 while maintaining an Overweight rating on the stock. This adjustment comes as the firm recalibrates its estimates for the first quarter ahead of the earnings season.
The revision reflects KeyBanc's updated forecasts, which include a lower expected oil price and a higher anticipated natural gas price. The firm believes that the current oil price pressures are excessive, factoring in pessimistic projections about OPEC+ production, U.S. oil output, and possible global recession impacts. Despite these concerns, KeyBanc's outlook for oil prices remains above the current NYMEX WTI futures prices.
In the natural gas market, the firm notes the role of recent weather patterns, including the absence of polar vortex events, and the initiation of new LNG export projects in stabilizing the market. Although KeyBanc remains cautious about ongoing production levels in the Lower 48 states, it suggests that a slowdown in oil production could lead to reduced natural gas production, possibly easing the supply concerns.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 14 analysts, the average target price for SM Energy Co (SM, Financial) is $42.43 with a high estimate of $58.00 and a low estimate of $33.00. The average target implies an upside of 84.23% from the current price of $23.03. More detailed estimate data can be found on the SM Energy Co (SM) Forecast page.
Based on the consensus recommendation from 15 brokerage firms, SM Energy Co's (SM, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for SM Energy Co (SM, Financial) in one year is $54.10, suggesting a upside of 134.91% from the current price of $23.03. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the SM Energy Co (SM) Summary page.
