SM Energy (NYSE:SM) Shares Gap Up - Should You Buy?

Key Points

• SM Energy shares opened higher, rising from a prior close of $35.25 to $36.64 and last trading near $36.77.
• Analysts have a generally positive view, with a consensus rating of “Moderate Buy” and an average price target of $39.81, though targets range from $32 to $52.
• The company beat quarterly earnings and revenue expectations, reported 215.3% year-over-year revenue growth, and pays a $0.22 quarterly dividend, equivalent to a 2.4% yield.

Shares of SM Energy Company (NYSE:SM - Get Free Report) gapped up prior to trading on Thursday. The stock had previously closed at $35.25, but opened at $36.64. SM Energy shares last traded at $36.7650, with a volume of 265,165 shares changing hands.

Analysts Set New Price Targets

SM has been the subject of several recent research reports. Stephens decreased their price target on SM Energy from $61.00 to $52.00 and set an "overweight" rating for the company in a report on Tuesday, July 7th. KeyCorp raised their price objective on SM Energy from $39.00 to $46.00 and gave the company an "overweight" rating in a research note on Tuesday, September 15th. Truist Financial lifted their price objective on shares of SM Energy from $43.00 to $48.00 and gave the stock a "buy" rating in a report on Wednesday. Weiss Ratings upgraded shares of SM Energy from a "hold (c)" rating to a "hold (c+)" rating in a research note on Friday, October 2nd. Finally, Roth Capital upgraded shares of SM Energy from a "neutral" rating to a "buy" rating and increased their target price for the company from $30.00 to $32.00 in a report on Monday, June 22nd. One analyst has rated the stock with a Strong Buy rating, ten have assigned a Buy rating and six have issued a Hold rating to the stock. Based on data from MarketBeat, the company presently has an average rating of "Moderate Buy" and a consensus price target of $39.81.

SM Energy Price Performance

The stock has a market cap of $8.80 billion, a P/E ratio of 7.28 and a beta of 0.95. The business has a 50 day simple moving average of $35.11 and a 200-day simple moving average of $31.85. The company has a debt-to-equity ratio of 0.85, a quick ratio of 0.62 and a current ratio of 0.62.

SM Energy (NYSE:SM - Get Free Report) last released its earnings results on Wednesday, August 5th. The energy company reported $2.19 EPS for the quarter, topping analysts' consensus estimates of $1.96 by $0.23. The company had revenue of $2.50 billion for the quarter, compared to analysts' expectations of $2.02 billion. SM Energy had a return on equity of 17.93% and a net margin of 18.20%.The business's revenue for the quarter was up 215.3% compared to the same quarter last year. During the same period in the previous year, the business posted $1.50 EPS. On average, sell-side analysts forecast that SM Energy Company will post 7.49 EPS for the current year.

SM Energy Announces Dividend

The business also recently disclosed a quarterly dividend, which was paid on Monday, September 21st. Shareholders of record on Monday, September 7th were given a $0.22 dividend. The ex-dividend date of this dividend was Friday, September 4th. This represents a $0.88 annualized dividend and a yield of 2.4%. SM Energy's payout ratio is currently 17.32%.

Insider Transactions at SM Energy

In other news, EVP James Barker Lebeck sold 17,500 shares of the firm's stock in a transaction that occurred on Friday, August 21st. The shares were sold at an average price of $37.02, for a total transaction of $647,850.00. Following the completion of the sale, the executive vice president owned 14,705 shares in the company, valued at $544,379.10. This trade represents a 54.34% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, Director Ashwin Venkatraman sold 3,650 shares of SM Energy stock in a transaction that occurred on Thursday, September 10th. The stock was sold at an average price of $38.28, for a total transaction of $139,722.00. Following the completion of the sale, the director directly owned 12,525 shares in the company, valued at $479,457. This trade represents a 22.57% decrease in their position. The SEC filing for this sale provides additional information. 0.45% of the stock is owned by insiders.

Hedge Funds Weigh In On SM Energy

Several institutional investors and hedge funds have recently bought and sold shares of SM. BlackRock Inc. bought a new stake in shares of SM Energy in the second quarter valued at $1,025,229,000. Canada Pension Plan Investment Board bought a new position in shares of SM Energy during the 2nd quarter worth $378,288,000. Dimensional Fund Advisors LP grew its stake in shares of SM Energy by 79.5% during the 1st quarter. Dimensional Fund Advisors LP now owns 9,995,353 shares of the energy company's stock worth $311,678,000 after acquiring an additional 4,426,751 shares during the period. Donald Smith & CO. Inc. purchased a new stake in SM Energy in the 2nd quarter worth about $199,602,000. Finally, Webs Creek Capital Management LP bought a new stake in SM Energy in the 2nd quarter valued at about $53,257,807. 94.56% of the stock is owned by institutional investors.

About SM Energy

SM Energy Company is an independent energy company engaged in the exploration, development, and production of oil, natural gas, and natural gas liquids. Its operations focus on onshore properties in the United States, with activities concentrated in major producing regions such as the Permian Basin in West Texas and the South Texas Eagle Ford.

The company's products include crude oil, natural gas, and natural gas liquids, which it sells to energy marketers, midstream companies, and other purchasers.

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