Mizuho raised the firm’s price target on SM Energy to $48 from $41 and keeps a Buy rating on the shares. Although higher commodity prices and an improving macro outlook have driven outperformance of U.S. oil and gas stocks, there are some secular tailwinds for the energy sector that give more confidence in longer-term cash generation, the analyst tells investors in a research note. The firm stays constructive on the space, particularly U.S. exploration and production stocks. However, while refining margins are likely strong, the risk/reward for the group is skewed to the downside, the analyst tells investors in a research note. As a result, the firm is upgrading Chevron (CVX), Matador Resources (MTDR) and Permian Resources (PR) to Buy, while downgrading Marathon Petroleum (MPC), HF Sinclair (DINO) and Magnolia Oil & Gas (MGY) to Neutral. Mizuho also added Pioneer Natural Resources (PXD) to its Top Picks, alongside Coterra Energy (CTRA) and Diamondback Energy (FANG), replacing Devon Energy (DVN).
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Read More on SM:
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- SM Energy provided guidance for FY23
- SM Energy reports Q2 adjusted EPS $1.28, consensus $1.09
- SM ENERGY REPORTS SECOND QUARTER 2023 RESULTS: STRONG OPERATIONAL EXECUTION AND INCREASED RETURN OF CAPITAL; CLOSED TRANSACTIONS ADDING 22,800 NET MIDLAND ACRES
- SM Energy price target lowered to $41 from $43 at RBC Capital
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