NEW YORK and NEW ORLEANS, Jan. 7, 2026 /PRNewswire/ -- Former Attorney General of Louisiana Charles C. Foti, Jr., Esq. and the law firm of Kahn Swick & Foti, LLC ("KSF") are investigating the proposed sale of Civitas Resources, Inc. (NYSE: CIVI) to SM Energy Company (NYSE: SM). Under the terms of the proposed transaction, shareholders of Civitas will receive 1.45 shares of SM Energy common stock for each share of Civitas that they own. KSF is seeking to determine whether this consideration and the process ...

SM Energy Company (NYSE:SM) is one of the low priced stocks to buy with high upside potential. On December 10, KeyBanc lowered the firm’s price target on SM Energy to $28 from $36, while keeping an Overweight rating on the shares. This sentiment was driven by a newfound confidence in the Civitas Resources Inc. (NYSE:CIVI) merger. While Keybanc was initially skeptical of the deal, an analysis of the financial model and direct discussions with management have validated the merger’s strategic value. The fir ...

Core Insights - The year 2025 has experienced significant volatility in equity markets due to tariff issues, inflation, softening job growth, and geopolitical tensions [1] - Despite market uncertainties, investors are encouraged to consider stocks with strong broker recommendations and improving earnings estimates [2][7] Stock Recommendations - Recommended stocks include Zumiez (ZUMZ), The Beachbody Company (BODI), CVR Energy (CVI), Civitas Resources (CIVI), and Adient (ADNT), all of which have shown strong earnings estimate revisions and favorable broker recommendations [2][7] - Zumiez is a specialty retailer focusing on apparel and accessories, with a strong performance driven by North American markets [6][7] - The Beachbody Company offers a vast digital fitness library and has consistently surpassed earnings estimates, showcasing a strong digital model [8][9] - CVR Energy is involved in renewable energy and petroleum refining, with a commitment to reducing carbon emissions [10][11] - Civitas Resources benefits from a strong presence in productive U.S. shale plays, enhancing its market position [11][12] - Adient has a diverse customer base and international presence, contributing to its growth potential [12][13] Screening Strategy - A screening strategy was developed to identify stocks based on improving broker recommendations and upward revisions in earnings estimates over the past four weeks [4] - Key parameters include net upgrades in broker ratings, percentage change in earnings estimates, price-to-sales ratio, stock price above $5, average daily volume over 100,000 shares, and market capitalization in the top 3000 [5][6]

Following my most recent publication on Civitas Resources ( CIVI ), in which I recommended a "Sell," the stock price has shown modest growth of +3.5%. At the same time, the stock initially declined in value until the marketMy professional journey in the investment field began in 2011. Today, I combine the roles of an Investment Consultant and an Active Intraday Trader. This synergistic approach allows me to maximize returns by leveraging deep knowledge in economics, fundamental investment analysis, and tech ...

Core Insights - Civitas Resources, Inc. (NYSE:CIVI) is recognized as one of the 9 hot energy stocks to buy, with UBS maintaining a Neutral rating and a price target of $27 following the third-quarter 2025 earnings report [1][2] Production and Financial Performance - The company reported a 6% increase in overall output, averaging approximately 336,000 barrels of oil equivalent per day (mboepd) during the quarter [1] - Oil volumes rose to 158 thousand barrels per day, while cash operating costs decreased by 5% to $9.67 per barrel of oil equivalent [1] - Adjusted earnings per share for the third quarter were $1.93, significantly exceeding the consensus forecast of $1.34 [2] - Revenue for the quarter was $1.17 billion, slightly below analyst expectations of $1.20 billion [2] Operational Improvements - UBS noted that Civitas Resources demonstrated "continued operational improvements" during the quarter, which are expected to benefit the company moving forward [2]

Core Viewpoint - The merger between Civitas Resources, Inc. (CIVI) and SM Energy Company (SM) has raised concerns among shareholders regarding its potential impact on long-term investment value [1]. Company Analysis - Civitas Resources, Inc. is involved in the energy sector, specifically focusing on oil and gas production [1]. - The company has a beneficial long position in its shares, indicating confidence in its long-term performance despite merger concerns [2]. Industry Context - The energy industry is currently experiencing significant consolidation, with mergers and acquisitions being a common strategy for growth and market positioning [1].

Core Viewpoint - SM Energy and Civitas Resources are moving forward with a planned merger aimed at creating significant shareholder value through synergies and strategic divestitures [1][17]. Management and Board Structure - The leadership team post-transaction will include experienced executives such as Beth McDonald as CEO and Wade Pursell as CFO [2]. - The Board of Directors will consist of 11 members, with six from SM Energy and five from Civitas, led by Non-Executive Chairman Julio Quintana [2]. Financial Strategy and Synergies - The companies aim to achieve at least $1 billion in divestitures within the first year after the merger to strengthen the balance sheet and enhance shareholder returns [2]. - Expected annual synergies are projected to be $200 million, with potential upside to $300 million, translating to a net present value (NPV-10) of $1.0 billion to $1.5 billion, representing 22% to 32% of the pro-forma market cap [2][3]. - Specific synergies include: - Drilling and completion savings of $100–$150 million [2]. - General and administrative (G&A) savings of $70–$95 million [3]. - Cost of capital savings of $30–$55 million [3]. Market Response - S&P Global Ratings and Fitch Ratings have placed SM Energy on CreditWatch Positive and Rating Watch Positive, indicating strong confidence in the post-merger outlook and improved credit profile [3].

Core Insights - Civitas Resources, Inc. (CIVI) reported third-quarter 2025 adjusted earnings per share of $1.93, exceeding the Zacks Consensus Estimate of $1.34, driven by higher natural gas price realizations, although down from $1.99 in the previous year due to lower oil price realizations [1][10] - The company’s revenues of $1.2 billion fell 8.2% from $1.3 billion year-over-year and missed the Zacks Consensus Estimate by $13 million, primarily due to a decline in oil and natural gas sales volume [2][10] - Civitas and SM Energy announced a merger agreement involving an all-stock deal, with a combined company valuation of approximately $12.8 billion, expected to generate over $1.4 billion in free cash flow in 2025 [3][10] Financial Performance - The average third-quarter sales volume decreased by 3.5% year-over-year to 336 thousand barrels of oil equivalent per day (Mboe/d), surpassing the Zacks Consensus Estimate of 332.2 Mboe/d [5] - Oil volume for the period was 158 thousand barrels per day (MBbls/d), slightly down from 159 MBbls/d in the prior year, while natural gas production was 546 thousand cubic feet per day [5] - The average sales price for oil was $65.24 per barrel, down 13.3% from $75 in the prior year, while the average realized natural gas price increased to $1.29 per thousand cubic feet from $0.17 [6] Costs and Expenses - Total operating expenses decreased to $895 million from $926 million year-over-year, attributed to lower taxes, depreciation, and other expenses, despite a 7.5% increase in lease operating expenses to $159 million [7] - The unit cash operating cost was reported at $9.67 per BOE [7] Financial Position - Cash flow from operations totaled $860 million, with capital expenditures of $491 million, resulting in adjusted free cash flow of $254 million [8] - Civitas approved a quarterly dividend of 50 cents per share, with a long-term debt of $5.1 billion and a debt-to-capitalization ratio of 43.5% as of September 30 [8]

Core Viewpoint - Civitas Resources reported quarterly earnings of $1.93 per share, exceeding the Zacks Consensus Estimate of $1.34 per share, but down from $1.99 per share a year ago, indicating an earnings surprise of +44.03% [1][2] Financial Performance - The company posted revenues of $1.17 billion for the quarter ended September 2025, missing the Zacks Consensus Estimate by 1.09% and down from $1.27 billion year-over-year [2] - Over the last four quarters, Civitas has surpassed consensus EPS estimates two times, but has not beaten consensus revenue estimates [2] Stock Performance - Civitas shares have declined approximately 43.7% since the beginning of the year, contrasting with the S&P 500's gain of 15.6% [3] - The current Zacks Rank for Civitas is 4 (Sell), indicating expected underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.35 on revenues of $1.14 billion, and for the current fiscal year, it is $5.44 on revenues of $4.62 billion [7] - The trend of estimate revisions for Civitas was unfavorable prior to the earnings release, which may impact future stock movements [5][6] Industry Context - The Oil and Gas - Exploration and Production - United States industry is currently in the bottom 21% of over 250 Zacks industries, suggesting a challenging environment for stocks in this sector [8]

Financial Performance - Net income for the three months ended September 30, 2025, was $177 million, or $1.99 per diluted share, with adjusted EBITDAX of $855 million[123]. - Cash flows provided by operating activities for the three months ended September 30, 2025, were $860 million, and adjusted free cash flow was $254 million[123]. - Crude oil sales revenue for the three months ended September 30, 2025, was $950 million, a 9% increase from $868 million in the previous quarter[137]. - Natural gas sales revenue for the three months ended September 30, 2025, was $65 million, a 35% increase from $48 million in the previous quarter[137]. - Total product revenue for the three months ended September 30, 2025, was $1.16 billion, a 10% increase from $1.05 billion in the previous quarter[137]. - Product revenues increased 10% to $1.2 billion for the three months ended September 30, 2025, compared to $1.1 billion for the three months ended June 30, 2025, driven by a 7% increase in total sales volumes and a 3% increase in total product pricing per Boe[141]. - Net income for the three months ended September 30, 2025, was $177 million, compared to $124 million for the previous quarter and $688 million for the nine months ended September 30, 2024[176]. - Adjusted EBITDAX for the three months ended September 30, 2025, was $855 million, an increase from $749 million in the previous quarter and $2,389 million for the nine months ended September 30, 2024[176]. - Net cash provided by operating activities for the three months ended September 30, 2025, was $860 million, compared to $298 million for the previous quarter and $1,877 million for the nine months ended September 30, 2024[179]. - Adjusted Free Cash Flow for the three months ended September 30, 2025, was $254 million, up from $123 million in the previous quarter and $548 million for the nine months ended September 30, 2024[179]. Sales and Production - Total sales volumes for the three months ended September 30, 2025, were 31 MMBoe, with average sales volumes of 336 MBoe per day[123]. - Average crude oil sales price after derivatives for the three months ended September 30, 2025, was $67.87 per Bbl, compared to $66.55 in the previous quarter and $76.16 for the same period in 2024[181]. - Average natural gas sales price after derivatives for the three months ended September 30, 2025, was $1.81 per Mcf, compared to $1.69 in the previous quarter and $0.86 for the same period in 2024[181]. - The company drilled, completed, and turned to sales 78, 94, and 115 net operated wells in the Permian Basin during the nine months ended September 30, 2025[172]. Expenses and Costs - Total operating expenses increased 1% to $895 million for the three months ended September 30, 2025, and decreased 3% to $2.661 billion for the nine months ended September 30, 2025, compared to the same periods in 2024[143]. - Lease operating expense increased 21% to $491 million for the nine months ended September 30, 2025, compared to $405 million for the same period in 2024, with the Permian Basin accounting for approximately 60% of the increase[144]. - Gathering, transportation, and processing expense increased 6% to $88 million for the three months ended September 30, 2025, but decreased 8% to $258 million for the nine months ended September 30, 2025, compared to the same period in 2024[146]. - Severance and ad valorem taxes increased 8% to $81 million for the three months ended September 30, 2025, but decreased 16% to $245 million for the nine months ended September 30, 2025, compared to the same period in 2024[149]. - Depreciation, depletion, and amortization expense decreased 1% to $497 million for the three months ended September 30, 2025, and decreased 5% to $1.4 billion for the nine months ended September 30, 2025, compared to the same periods in 2024[150][151]. - General and administrative expense decreased 2% to $52 million for the three months ended September 30, 2025, and decreased 7% to $162 million for the nine months ended September 30, 2025, compared to the same periods in 2024[152][153]. Capital Expenditures and Investments - Capital expenditures for the three months ended September 30, 2025, totaled $491 million[123]. - Capital expenditures for drilling and completion activities decreased by $200 million year over year, reflecting a 5% reduction in the 2025 capital investment program compared to 2024[172]. Debt and Liquidity - As of September 30, 2025, liquidity was $2.2 billion, consisting of $56 million in cash and $2.1 billion in available borrowing capacity on the Credit Facility[163]. - Total sources of cash and cash equivalents for the nine months ended September 30, 2025, were $4.909 billion, an increase from $3.822 billion in the same period of 2024[168]. - Total uses of cash and cash equivalents for the nine months ended September 30, 2025, were $4.929 billion, compared to $4.902 billion in the same period of 2024[168]. - Interest expense for the three months ended September 30, 2025, was $120 million, compared to $114 million for the three months ended June 30, 2025, with average debt outstanding of $5.5 billion and $5.4 billion, respectively[157]. - For the nine months ended September 30, 2025, interest expense was $341 million, slightly down from $342 million in the same period of 2024, with average debt outstanding increasing from $4.8 billion to $5.4 billion[158]. - As of September 30, 2025, the company had $350 million outstanding under its Credit Facility, with compliance to all financial covenants[186]. Market and Risk Factors - The company is exposed to counterparty credit risk associated with its derivative activities, with contracts executed with 16 counterparties, all having investment grade credit ratings[187]. - The marketability of the company's production is influenced by the availability and capacity of third-party refineries and pipeline infrastructure, which could affect pricing and production plans[190].