SM - SM Energy's Capital Efficiency Creates An Attractive Opportunity

2024-05-12 21:11:55 ET

Summary

• SM Energy's stock has nearly doubled in value over the past year and is up 28% since being rated a "buy" in December.
• The company reported better-than-expected earnings for Q1, with improved drilling efficiency leading to increased free cash flow.
• SM Energy is focusing on oil production and has a strong balance sheet, making it an attractive investment with potential margin expansion and ongoing buybacks.

Shares of SM Energy ( SM ) have been a strong performer over the past year, nearly doubling in value. I last covered SM in December , rating shares a “buy,” and since then, the stock is up 28% vs the 9% return in the S&P 500’s. Given this strong performance and with shares near my fair value of $52, now is an opportune time to revisit the stock. Recent results leave me bullish....

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