KLR Group Raises Price Target on SM Energy (SM) to $59; Reiterates Buy

October 24, 2016 8:57 AM EDT
Get Alerts SM Hot Sheet
Price: $32.54 -1.87%

Rating Summary:
    21 Buy, 14 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 35 | Down: 31 | New: 11
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KLR Group reiterated a Buy rating on SM Energy (NYSE: SM), and raised the price target to $59.00 (from $53.00), as the company places more concentration in the Midland Basin. SM is acquiring ~35,700 net acres in Howard/Martin Counties in the Midland Basin ~$1.6 billion, comprising ~$1.1 billion in cash and 13.4 million common equity shares valued at ~$500 million.

Analyst John Gerdes commented, "We are increasing our target price $6 to $59 per share following greater development concentration in the Midland Basin and full value for the Williston Basin divestiture. The company’s mid-cycle capital yield is ~120% versus the industry median cash recycle ratio of ~125%. Prior to the recent Howard County acquisitions, SM’s capital yield was slightly less than 100%."

For an analyst ratings summary and ratings history on SM Energy click here. For more ratings news on SM Energy click here.

Shares of SM Energy closed at $39.37 yesterday.

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