SM Energy Upgraded to Buy - Analyst Blog

By
A A A

On Mar 19, Zacks Investment Research upgraded independent oil and gas company SM Energy Company ( SM ) to a Zacks Rank #2 (Buy).

Why the Upgrade?

Operating environment and future growth prospects seem bright for SM Energy, as earnings estimates for this Denver, Colorado-based company are on the rise. Over the last 30 days, the Zacks Consensus Estimate for first quarter of 2013 has increased 35.48% to 42 cents per share, while that for 2013 went up 15.82% to $1.83 per share.


The momentum has been strong since SM Energy released its fourth quarter and full-year 2012 earnings results on Feb 20. Adjusted earnings per share came in at 45 cents per share, comfortably beating the Zacks Consensus Estimate of 23 cents on record production.

Total revenue was $444.3 million in the quarter, showing an improvement of 17.1% from $379.5 million in the prior-year quarter. The revenue figure also surpassed the Zacks Consensus Estimate of $414.0 million.

Apart from delivering positive earnings surprises in two of the last four quarters with an average beat of 32.70%, the company also has an impressive long-term expected earnings growth rate of 18.0%.

We expect SM Energy's attractive oil and gas investments, balanced and diverse portfolio of proved reserves and development drilling opportunities to create long-term value for shareholders.

Additionally, SM Energy has meaningful leasehold positions of the leading US shale plays, including the Bakken, Niobrara, Haynesville, and Granite Wash. We believe these will provide the company with many years of profitable drilling inventory.

Other Stocks to Consider

Other stocks worth considering in the energy sector include EPL Oil & Gas Inc. ( EPL ), Range Resources Corp. ( RRC ) and Stone Energy Corporation ( SGY ). All these firms - sporting a Zacks Rank #1 (Strong Buy) - offer value and are worth accumulating at current levels.



EPL OIL&GAS INC (EPL): Free Stock Analysis Report

RANGE RESOURCES (RRC): Free Stock Analysis Report

STONE ENERGY CP (SGY): Free Stock Analysis Report

SM ENERGY CO (SM): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: EPL , RRC , SGY , SM

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

Most Active by Volume

122,762,267
  • $15.81 ▼ 1.43%
62,277,320
  • $8.50 ▼ 6.80%
58,664,622
  • $128.46 ▼ 1.50%
48,473,163
  • $25.99 ▲ 0.39%
36,433,239
  • $5.12 ▲ 7.34%
35,593,669
  • $6.63 ▲ 5.41%
30,823,989
  • $16.68 ▼ 3.02%
30,676,302
    $2.08 unch
As of 2/27/2015, 04:15 PM


Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com