Cheap Valuation Means SM Energy (SM) Still Has Upside After Downward Target Price Revisions

SM Energy Company (NYSE:SM) is one of the 10 Cheap Stocks with Huge Upside Potential. Tim Rezvan of KeyBanc reaffirmed his Buy rating on SM Energy Company (NYSE:SM) stock, along with the price target of $28, on January 17. Earlier in the same week, on January 13, RBC Capital analyst Scott Hanold lowered his price target on the stock from $35 to $29. However, the analyst kept his Hold rating on the shares. The analyst explained in a research note that the firm updated its estimates after completing its final fourth-quarter commodity mark-to-market analysis.

Additionally, analyst Scott Hanold noted that the price target revision also reflects RBC’s updated commodity price outlook, which now assumes lower oil prices. This outlook led to a lower price target. Interestingly, the geopolitical tensions in the Middle East are keeping oil prices elevated.

Mizuho Securities also presented a similar stance on the company on January 9. William Janela of Mizuho Securities maintained a Buy rating while cutting the firm’s price target for the stock from $38 to $34. His revised price target implies an impressive 82% upside from the current levels. The update comes ahead of the company’s fourth-quarter earnings report. According to the analyst, the price target adjustment reflects a modestly slower activity pace compared with the firm’s previous model assumptions, which led to the revision in its outlook.

SM Energy Company (NYSE:SM) operates as an independent energy company. The company is involved in the exploration, production, acquisition, and development of gas, oil, and natural gas liquids in Texas. It was founded in 1908 and is based in Denver, Colorado.

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Disclosure: None. This article is originally published at Insider Monkey.