SM Energy Inc. (NYSE: SM ) is one of them 14 Most Undervalued NYSE Stocks to Buy According to Analysts.
Mizuho, on February 26, lowered its target price on SM Energy by 8.8% to $31 (from $34). Despite the price target reduction, the company maintained its best performance year on the stock. The update comes a day after SM Energy released its Q4 and full-year 2025 earnings on February 25.
SM Energy, in the fourth quarter, reported diluted adjusted earnings per share of $0.83, which was just a tick above the consensus estimate of $0.85. This print represents a ~57% YoY decline versus Q4 2024 and was primarily driven by lower global oil and gas prices, coupled with lower net production volumes. Despite this large decrease, the company’s adjusted free cash flow increased slightly due to significant reductions in CapEx expenses.
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Moving forward into 2026, the company plans to continue this strategy of focusing on value (through disciplined capital investment and increased focus on high-margin products/commodities), rather than volume, to maximize free cash flow.
The company is also looking to acquire value-enhancing synergies from its merger with Civitas (which closed on January 30) over the next two years. Management has previously indicated $200 million in annual cost synergies of which ~80% has been implemented. They also believe they can extract an additional $100 million in annual savings.
Additional free cash flow from these initiatives, along with $950 million in proceeds from the company’s divestiture of certain South Texas assets (which Stephens thinks is “positive”), will be used to accelerate the company’s capital program return and debt reduction.
SM Energy Company (NYSE: SM) is an energy company engaged in the acquisition, exploration, development and production of oil, gas and natural gas liquids. The company is located in Denver, Colorado and was founded in 1908.
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Read more: 13 Deep Value Stocks to Buy Right Now and 14 Best Consumer Discretionary Stocks to Buy Right Now
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