SM Energy (SM) PT Lowered to $37 at Mizuho
Mizuho analyst William Janela lowered the price target on SM Energy (NYSE: SM) to $37.00 (from $38.00) while maintaining a Outperform rating.
The analyst commented: "Focus is on CIVI integration, asset sale commentary, cash returns. We expect a strong operational quarter from SM (2Q oil volumes near top-end of guide), though our EBITDX/CFPS forecasts are ~10% below current consensus as we MTM for much weaker Waha gas pricing in the quarter. Investors are focused on commentary around asset sales, as SM has signaled its increased scale post-CIVI gives it a "larger candidate set" for potential divestitures. In our view, additional asset sales that are accretive/strategic would be a plus, but we believe the clearer path to re-rating the stock is for SM to execute/beat as it integrates CIVI and decisively prove out the merits of the merger to investors. Trim PT to $37 (from $38) on weaker near-term gas realizations; maintain Outperform."