NEW YORK (TheStreet) -- SM Energy (SM - Get Report) shares were downgraded to "market perform" from "outperform" by analysts at Wells Fargo (WFC - Get Report) while lowering its price target range to $75-$82 from $84-$88.
Shares are down -0.5% to $75.06 in early market trading on Friday.
The stock has a 52 week range of $58.89 to $94.
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TheStreet Ratings team rates SM ENERGY CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate SM ENERGY CO (SM) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 3.0%. Since the same quarter one year prior, revenues rose by 29.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- SM ENERGY CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, SM ENERGY CO turned its bottom line around by earning $2.52 versus -$0.84 in the prior year. This year, the market expects an improvement in earnings ($6.29 versus $2.52).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 292.2% when compared to the same quarter one year prior, rising from $16.73 million to $65.61 million.
- The gross profit margin for SM ENERGY CO is currently very high, coming in at 72.28%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.41% is above that of the industry average.
- Net operating cash flow has slightly increased to $299.73 million or 6.17% when compared to the same quarter last year. Despite an increase in cash flow, SM ENERGY CO's cash flow growth rate is still lower than the industry average growth rate of 17.46%.
- You can view the full analysis from the report here: SM Ratings Report