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SM Energy 'A Value Name' In Oil & Gas, Williams Capital Says Buy

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Williams Capital initiated coverage on SM Energy Co (NYSE: SM) witha Buy rating and $57 price target, describing it as a value name (it remains one of the cheapest names in the sector) with a solid balance sheet and assets, as well as a conservative management team.

"The recent Midland Basin acquisition expands the company's footprint to nearly 47,000 net acres, providing significant running room across the stacked-pay Wolfcamp/Spraberry zones," wrote the analysts, forecasting the company's oil growth to be 20.4 percent and 23 percent in 2017 and 2018, respectively.

Shares are trading at 6.7x and 4.4x EV/EBITDA for 2017 and 2018 compared to its peers' average multiples of 8.2x and 5.9x, respectively. The $57 price target implies 2017 and 2018 EV/EBITDA metrics 8.5x and 5.5x, respectively.

Latest Ratings for SM

DateFirmActionFromTo
Apr 2019DowngradesPositiveNeutral
Apr 2019Initiates Coverage OnOutperform
Mar 2019Initiates Coverage OnOverweight

View More Analyst Ratings for SM
View the Latest Analyst Ratings

Posted-In: Williams CapitalAnalyst Color Initiation Analyst Ratings

 

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