Core Viewpoint - J.P. Morgan analyst Zach Parham maintains a Neutral rating on SM Energy Co with a price target of $41.00, highlighting the company's ongoing integration of Uinta assets and minimal impact from previous operational disruptions [1]. Production and Financial Estimates - For the first quarter, oil volumes are expected to reach 103.0 MBo/d, slightly above SM's guidance and in line with consensus expectations of 103.1 MBo/d [2]. - SM plans to deliver 45 net Turn-In-Lines (TILs) in the first quarter, which is 30% of its annual target of 150 net TILs, with a greater impact anticipated in the second quarter [2]. - Second-quarter oil volumes are projected to increase by 6% quarter-over-quarter to 106.9 MBo/d, aligning with the company's full-year production goal of approximately 107 MBo/d [3]. Financial Performance - The estimated cash flow per share (CFPS) for the first quarter is $4.37, slightly above the consensus estimate of $4.28, while EBITDA is projected at $570 million, exceeding the consensus of $559 million [3][4]. - Capital expenditures for the quarter are expected to be $430 million, within the company's guidance, and free cash flow (FCF) is estimated at $72 million [4]. Annual Projections - For the full year, SM projects oil production of 107.7 MBo/d, supported by $1.31 billion in capital spending, resulting in $740 million of free cash flow and a 22% FCF yield [5]. - The company completed a $2.0 billion cash acquisition of XCL Resources in October 2024, expanding its operations in the Uinta Basin [5]. Strategic Focus - Due to the cash-financed acquisition, SM is prioritizing debt reduction over share buybacks, aiming to reduce leverage below 1x by mid-2025, which currently results in a cash return yield lagging behind the peer median [6].

Company Performance - SM Energy's stock closed at $30.25, down 1.75% from the previous trading day, underperforming the S&P 500's loss of 0.33% [1] - Over the past month, SM Energy's stock has decreased by 4.88%, while the Oils-Energy sector gained 3.64% and the S&P 500 lost 4.03% [1] Upcoming Earnings - SM Energy is projected to report earnings of $1.67 per share, reflecting a year-over-year growth of 18.44% [2] - The consensus estimate for revenue is $836.26 million, which represents a 49.37% increase from the prior-year quarter [2] Annual Estimates - For the annual period, earnings are anticipated to be $7.11 per share and revenue is expected to reach $3.47 billion, indicating increases of 4.56% and 29.04% respectively from the last year [3] - Recent changes in analyst estimates for SM Energy are crucial as they reflect evolving short-term business trends, with positive revisions seen as a favorable sign for the company's outlook [3] Zacks Rank and Valuation - SM Energy currently holds a Zacks Rank of 4 (Sell), with a 6.43% decline in the Zacks Consensus EPS estimate over the past month [5] - The company has a Forward P/E ratio of 4.33, indicating a discount compared to its industry's Forward P/E of 8.51 [5] Industry Overview - The Oil and Gas - Exploration and Production - United States industry is part of the Oils-Energy sector, currently holding a Zacks Industry Rank of 127, placing it in the top 50% of over 250 industries [6] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [6]

Company Performance - SM Energy's stock closed at $30.26, reflecting a +0.9% increase compared to the previous day, outperforming the S&P 500's daily gain of 0.64% [1] - Over the past month, SM Energy shares have decreased by 22.14%, while the Oils-Energy sector and the S&P 500 have lost 3.15% and 7.69%, respectively [1] Upcoming Earnings - The upcoming earnings release is expected to show an EPS of $1.65, representing a 17.02% increase year-over-year [2] - Revenue is anticipated to reach $833.14 million, indicating a 48.81% increase compared to the same quarter last year [2] Annual Forecast - Zacks Consensus Estimates project earnings of $7.12 per share and revenue of $3.47 billion for the year, reflecting changes of +4.71% and +29.14% year-over-year, respectively [3] - Recent changes to analyst estimates for SM Energy may indicate positive business outlook trends [3] Valuation Metrics - SM Energy is currently trading at a Forward P/E ratio of 4.21, which is lower than the industry average Forward P/E of 8.06, suggesting a discount [6] - The Oil and Gas - Exploration and Production - United States industry ranks in the top 16% of all industries, with a current Zacks Industry Rank of 39 [6] Zacks Rank System - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has a strong track record, with 1 rated stocks delivering an average annual return of +25% since 1988 [5] - SM Energy currently holds a Zacks Rank of 3 (Hold), with the consensus EPS estimate having decreased by 12.04% over the last 30 days [5]

Company Performance - SM Energy closed at $27.59, reflecting a +1.62% increase from the previous day, outperforming the S&P 500's gain of 0.55% [1] - Over the last month, SM Energy's shares have decreased by 27.1%, which is significantly worse than the Oils-Energy sector's loss of 6.33% and the S&P 500's loss of 5.56% [1] Upcoming Financial Results - Analysts expect SM Energy to report earnings of $1.87 per share, indicating a year-over-year growth of 32.62% [2] - Revenue is anticipated to be $854.53 million, representing a 52.63% increase compared to the same quarter last year [2] Annual Estimates - For the annual period, earnings are projected at $7.60 per share and revenue at $3.49 billion, reflecting increases of +11.76% and +29.89% respectively from the previous year [3] - Recent revisions to analyst forecasts for SM Energy are crucial as they indicate changing business trends, with positive revisions suggesting analyst optimism [3] Valuation Metrics - SM Energy is currently trading at a Forward P/E ratio of 3.57, which is a discount compared to the industry average Forward P/E of 7.69 [6] - The Oil and Gas - Exploration and Production - United States industry, part of the Oils-Energy sector, holds a Zacks Industry Rank of 28, placing it in the top 12% of over 250 industries [6] Zacks Rank System - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has a strong track record, with 1 rated stocks delivering an average annual return of +25% since 1988 [5] - Currently, SM Energy holds a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate having decreased by 6.18% in the past month [5]

Core Insights - SM Energy reported a revenue of $852.22 million for the quarter ended December 2024, marking a 40% increase year-over-year, with an EPS of $1.91 compared to $1.56 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate by 0.34%, while the EPS exceeded the consensus estimate by 2.69% [1] Financial Performance Metrics - Average daily production of total oil equivalent was 208 million barrels, slightly below the estimated 211.97 million barrels [4] - Average daily production of natural gas was 424.8 million cubic feet, slightly above the estimated 423.21 million cubic feet [4] - Average daily production of crude oil was 106.9 million barrels, below the estimated 110.16 million barrels [4] - Average daily production of NGLs was 30.3 million barrels, below the estimated 31.93 million barrels [4] Pricing and Revenue Analysis - Average realized price for crude oil was $70.54 per barrel, exceeding the estimate of $68.23 [4] - Average realized price for natural gas was $2.50 per thousand cubic feet, slightly above the estimate of $2.49 [4] - Operating revenue from crude oil production was $682.21 million, below the average estimate of $721.43 million, but showed a year-over-year increase of 45.1% [4] - Operating revenue from natural gas production was $85.49 million, slightly above the estimate of $85.11 million, with a year-over-year increase of 3.5% [4] - Operating revenue from NGL production was $68.16 million, exceeding the estimate of $61.85 million, representing a year-over-year increase of 26.4% [4] - Total operating revenue from oil, gas, and NGL production was $835.86 million, below the estimate of $868.38 million, but reflecting a year-over-year increase of 37.7% [4] - Other operating income was reported at $16.36 million, significantly above the estimate of $1.62 million, with a year-over-year increase of 775.5% [4] Stock Performance - SM Energy's shares have returned -14.8% over the past month, compared to a -1.8% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Growth investors are focused on stocks with above-average financial growth, but identifying such stocks can be challenging due to inherent volatility and risks [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score simplifies the process of finding promising growth stocks by analyzing a company's real growth prospects beyond traditional metrics [2] - SM Energy (SM) is highlighted as a recommended stock with a favorable Growth Score and a top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is crucial for growth investors, with double-digit growth being highly desirable as it indicates strong future prospects [3] - SM Energy has a historical EPS growth rate of 49.5%, with projected EPS growth of 20.3% this year, significantly surpassing the industry average of 12.2% [4] Group 3: Cash Flow Growth - Higher-than-average cash flow growth is essential for growth-oriented companies, allowing them to expand without relying on external funding [5] - SM Energy's year-over-year cash flow growth is 14.5%, compared to an industry average of -11.2% [5] - The company's annualized cash flow growth rate over the past 3-5 years is 15.4%, exceeding the industry average of 10.4% [6] Group 4: Earnings Estimate Revisions - Positive trends in earnings estimate revisions are correlated with stock price movements, making them an important consideration for investors [7] - SM Energy has seen a 7.4% increase in current-year earnings estimates over the past month [7] Group 5: Overall Positioning - SM Energy has achieved a Growth Score of B and a Zacks Rank 1 due to positive earnings estimate revisions, positioning it well for potential outperformance [9]

Core Viewpoint - SM Energy (SM) has experienced a significant downtrend, with a stock decline of 14.3% over the past four weeks, but it is now in oversold territory, suggesting a potential turnaround due to improved earnings expectations from analysts [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is a key technical indicator used to identify oversold stocks, with a reading below 30 typically indicating oversold conditions [2]. - SM's current RSI reading is 24.15, indicating that the heavy selling pressure may be exhausting, which could lead to a price rebound [5]. Group 2: Fundamental Indicators - There is a strong consensus among sell-side analysts regarding SM's earnings, with a 7.4% increase in the consensus EPS estimate over the last 30 days, suggesting potential price appreciation [6]. - SM holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a strong potential for a near-term turnaround [7].

Group 1 - The article promotes a free two-week trial for the investment group Distressed Value Investing, which offers exclusive research on various companies and investment opportunities [1] - The author, Aaron Chow, has over 15 years of analytical experience and co-founded a mobile gaming company that was acquired by PENN Entertainment, indicating a strong background in the industry [2] - Distressed Value Investing focuses on value opportunities and distressed plays, particularly in the energy sector, highlighting a specific investment strategy [2] Group 2 - The article emphasizes that past performance is not indicative of future results, which is a common disclaimer in investment discussions [3] - It clarifies that no specific investment recommendations are being made, and the views expressed may not represent the entire platform's opinions [3] - The analysts contributing to the platform include both professional and individual investors, suggesting a diverse range of perspectives [3]

Financial Data and Key Metrics Changes - Record daily oil production increased by 23% year-over-year, with total production up 12%, resulting in $2 billion in adjusted EBITDAX and $485 million in adjusted free cash flow [45][99] - The sustainable annual fixed dividend was increased to $0.80 per share, marking a record high [45][99] - The 2025 budget is based on $70 WTI, $3.25 gas, and $27 NGLs, with a forecasted year-over-year increase in free cash flow of more than 40% [45][99] Business Line Data and Key Metrics Changes - The addition of Utah assets is expected to generate over 20% production growth and over 30% oil production growth year-over-year [71] - Year-end estimated net proved reserves totaled 678 million barrels of oil equivalent, a 12% increase from 2023, with oil reserves growing by 29% [73] - The 2025 capital program is expected to approximate $1.3 billion, with plans to drill approximately 105 net wells and complete approximately 150 net wells [76][81] Market Data and Key Metrics Changes - Production is forecasted to average between 200,000 to 215,000 BOE per day in 2025, up approximately 20% from 2024 [100] - Oil production is estimated to be 51% to 52% of total production, translating to 102,000 to 112,000 barrels per day, which is over 30% higher than the 2024 average [100] Company Strategy and Development Direction - The 2025 strategy focuses on operational execution, returning capital to stockholders, and expanding the portfolio of top-tier economic drilling inventory [15][69] - The company aims to optimize free cash flow over time and maintain a strong balance sheet while integrating the Uinta Basin expansion [57][112] - The operational plan emphasizes capital efficiency and maximizing returns from all three core assets [82] Management's Comments on Operating Environment and Future Outlook - Management highlighted the growing demand for energy and electricity, projecting a 50% increase in primary energy demand by 2050 [11][65] - The company is positioned to support this growth with a focus on safety, emissions, and operational excellence [12][66] - Management expressed confidence in the company's ability to create opportunities and expand inventory over the long term [15][68] Other Important Information - The company reduced the balance on its revolver by $121.5 million, demonstrating a commitment to debt reduction [106] - Since the inception of the return of capital program, the company has returned over $540 million, which is more than 40% of free cash flow to stockholders [108] Q&A Session Summary Question: What are the expectations for production growth in 2025? - The company expects over 20% production growth and over 30% oil production growth year-over-year due to the addition of Utah assets [71] Question: How does the company plan to manage capital expenditures in 2025? - The capital program is expected to approximate $1.3 billion, with a focus on drilling and completion capital allocation across core assets [76][81] Question: What is the company's approach to debt management? - The company aims to prioritize debt reduction to meet leverage targets before directing free cash flow towards share buybacks [106][107]

Core Viewpoint - SM Energy Company reported strong fourth-quarter earnings, exceeding expectations, driven by increased production volumes despite higher production expenses [1][2]. Financial Performance - Adjusted earnings for Q4 2024 were $1.91 per share, surpassing the Zacks Consensus Estimate of $1.86, and up from $1.56 in the same quarter last year [1]. - Total revenues for the quarter reached $852 million, an increase from $609 million year-over-year, but slightly below the Zacks Consensus Estimate of $855 million [1]. Operational Performance - Total production for Q4 was 208 thousand barrels of oil equivalent per day (MBoe/d), a 36% increase from 153.5 MBoe/d in the previous year, though it fell short of the consensus estimate of 212 MBoe/d [3]. - Oil production rose 62% year-over-year to 106.9 thousand barrels per day (MBbls/d), missing the estimate of 110 MBbls/d [3]. - Natural gas production was 424.8 million cubic feet per day, up 17% year-over-year, while natural gas liquids contributed 30.3 MBbls/d, a 13% increase [4]. Pricing and Costs - The average realized price per Boe was $43.68, up from $42.99 year-over-year, while the average realized oil price decreased by 10% to $69.34 per barrel [5]. - Average realized natural gas price fell 11% to $2.19 per thousand cubic feet, but natural gas liquids saw a 12% increase to $24.49 per barrel [5]. - Unit lease operating expenses rose 1% to $5.35 per Boe, while general and administrative expenses decreased 16% to $2.19 per Boe [6]. Capital Expenditures and Cash Flow - Capital expenditures for the quarter totaled $362.3 million, with adjusted free cash flow amounting to $188.9 million [7]. Balance Sheet - As of December 31, 2024, SM Energy reported no cash and cash equivalents, with a net debt of $2.8 billion [8]. Guidance - For Q1 2025, production is expected to be between 191-198 MBoe/d, with oil contributing 52-53% [10]. - Full-year 2025 production is anticipated to be in the range of 200-215 MBoe/d, implying a 22% year-over-year increase, with oil production expected to rise by 33% [11]. - Full-year capital expenditures are projected to be approximately $1.3 billion [11].