Overview

• Independent energy firm's Q4 net income was $109 mln, with adjusted EBITDAX of $509 mln

• Company achieved record production and operating cash flow for full-year 2025

• Company announced $950 mln South Texas asset divestiture to bolster balance sheet

Outlook

• SM Energy targets $1 bln in divestitures for 2026, with $950 mln announced

Result Drivers

• LOWER OPERATING COSTS - SM Energy reported cash operating costs 13% below guidance mid-point, driven by reduced lease operating expenses and ad valorem taxes

• RECORD PRODUCTION - Company achieved record net production of 75.5 MMBoe for full-year 2025, a 21% increase year-over-year

• ASSET DIVESTITURE - SM Energy announced $950 mln South Texas asset divestiture, advancing deleveraging objectives

Company press release: ID:nPn2254nZa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 6 "strong buy" or "buy", 6 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the oil & gas exploration and production peer group is "buy."

• Wall Street's median 12-month price target for SM Energy Co is $28.50, about 26.9% above its February 24 closing price of $22.46

• The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 4 three months ago

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