Wells Fargo Upgrades SM Energy (SM) to Outperform; Ramp Looming; 2012 Street Numbers Likely Too Low

Wells Fargo upgraded SM Energy (NYSE: SM) from Market Perform to Outperform. Valuation range goes to $87-93 from $68-75.

Wells analyst says, "With funding hangover removed following the Eagle Ford transactions, we believe SM can exploit its Eagle Ford position and post better than expected 2012 EBITDA and production growth. Shares are particularly attractive at current levels, trading at a 19% discount to our NAV estimate and at 4.5x 2012E EV/EBITDAX, a 32% discount to its mid-cap peers. In conjunction with this rating change, we are raising our 2011 EPS estimate to $2.30 from $2.24 and raising our 2012 EPS estimate to $4.67 from $4.34."

For more ratings news on SM Energy click here and for the rating history of SM Energy click here.

Shares of SM Energy closed at $72.14 yesterday.

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