SM Energy(US:SM) ZACKSยท2024-06-12 16:00Core Viewpoint - SM Energy is well-positioned for sustainable production growth, supported by a strong business model and a Zacks Rank 2 (Buy) rating [2] Financial Performance - The Zacks Consensus Estimate for SM Energy's 2024 earnings is $6.63 per share, indicating a growth of 12.6% year-over-year, with revenues expected to reach $2.58 billion, reflecting an 8.9% increase [3] - For 2025, the earnings estimate is $7.46 per share, suggesting a 12.6% improvement, while revenues are projected at $2.82 billion, indicating a 9.2% year-over-year rise [7] - SM Energy's stock has increased by 70.5% over the past year, outperforming the broader sector's growth of 14.5% and the S&P 500's increase of nearly 18% [14] Operational Highlights - SM Energy has demonstrated strong performance in the Austin Chalk region, with 111 wells reaching an Initial Production over 30 days (IP30) yielding approximately 46-77% liquid hydrocarbons [10] - The company anticipates net production volumes of 57-60 million barrels of oil equivalent (MMBoe) for 2024, with oil comprising 44% of the total, representing a 3-4% year-over-year increase [17] - SM Energy holds approximately 155,000 net acres in South Texas and 111,000 net acres in the Midland Basin, indicating a positive outlook for sustained oil production growth [9] Investment Considerations - SM Energy has an impressive Value Score of B, suggesting it is undervalued, and stocks with a favorable Value Score combined with a solid Zacks Rank are considered strong investment opportunities [6] - The company has consistently outperformed earnings estimates in the past four quarters, with an average surprise of 13.8% [8]