Adversity is less terrifying than hope: SM Energy Company (SM)

SM Energy Company (NYSE: SM) stock fell -3.03% on Tuesday to $32.99 against a previous-day closing price of $34.02. With 1.29 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.65 million shares. During the session, the Oil & Gas E&P company that operates in wider Energy sector, reached to the highest price of $34.00 whereas the lowest price it dropped to was $32.73. The 52-week range on SM shows that it touched its highest point at $54.97 and its lowest point at $28.91 during that stretch. It currently has a 1-year price target of $51.75. With its current market cap of 4.08 billion, SM has annualized dividend of $0.60 while the current yield stands at 1.82%. Beta for the stock currently stands at 4.54.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of SM was down-trending over the past week, with a drop of -1.52%, but this was down by -6.46% over a month. Three-month performance dropped to -25.87% while six-month performance fell -10.13%. The stock gained 5.20% in the past year, while it has lost -5.28% so far this year. A look at the trailing 12-month EPS for SM yields 9.90 with Next year EPS estimates of 8.12. For the next quarter, that number is 1.36. This implies an EPS growth rate of 104.40% for this year and 10.55% for next year. EPS is expected to grow by 80.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 15.20%.

Float and Shares Shorts:

At present, 123.19 million SM shares are outstanding with a float of 120.75 million shares on hand for trading. On Oct 13, 2022, short shares totaled 4.84 million, which was 3.94% higher than short shares on Sep 14, 2022. In addition to Mr. Herbert S. Vogel as the firm’s Pres, CEO & Director, Mr. A. Wade Pursell serves as its Exec. VP & CFO.


Institutional Ownership:

Through their ownership of 92.40% of SM’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 54.23% of SM, in contrast to 37.35% held by mutual funds. Shares owned by individuals account for 2.71%. As the largest shareholder in SM with 14.95% of the stake, BlackRock Fund Advisors holds 18,360,800 shares worth 18,360,800. A second-largest stockholder of SM, The Vanguard Group, Inc., holds 14,773,455 shares, controlling over 12.03% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in SM, holding 5,829,382 shares or 4.75% stake. With a 7.39% stake in SM, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 9,069,233 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 3.04% of SM stock, is the second-largest Mutual Fund holder. It holds 3,730,957 shares valued at 129.95 million. Vanguard Small Cap Index Fund holds 2.58% of the stake in SM, owning 3,163,966 shares worth 110.2 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SM since 16 analysts follow the stock currently. There are 7 analysts who recommend BUY ratings, while 2 suggest SELL ratings. Of the remaining analysts, 5 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With SM analysts setting a high price target of $62.00 and a low target of $36.00, the average target price over the next 12 months is $48.57. Based on these targets, SM could surge 87.94% to reach the target high and rise by 9.12% to reach the target low. Reaching the average price target will result in a growth of 47.23% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. SM will report FY 2022 earnings on 02/23/2024. Analysts have provided yearly estimates in a range of $7.42 being high and $7.01 being low. For SM, this leads to a yearly average estimate of $7.26. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. SM Energy Company surprised analysts by $0.10 when it reported $1.82 EPS against a consensus estimate of $1.72. The surprise factor in the prior quarter was $0.03. Based on analyst estimates, the high estimate for the next quarter is $1.57 and the low estimate is $1.02. The average estimate for the next quarter is thus $1.26.

Summary of Insider Activity:

Insiders traded SM stock several times over the past three months with 0 Buys and 0 Sells. In these transactions, 0 shares were bought while 0 shares were sold. The number of buy transactions has increased to 53 while that of sell transactions has risen to 54 over the past year. The total number of shares bought during that period was 810,633 while 528,035 shares were sold.

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