Story updated at 10 a.m. to reflect market activity.
SM Energy fell 18.6% to $72.94 in morning trading.
The firm removed its price target for the oil and gas company, which was previously set at $108. The downgrade is largely due to the company's lower crude production.
"Year-end 2013 proved reserve bookings were strong, with total reserves up 46% and PV-10 totaling $5.5 billion, which increased our 1P estimate by $15/share to $51/share," analyst Jack N. Aydin said.
"However, the Company's Eagle Ford EURs were largely revised lower despite incorporating longer lateral lengths, which increased the average well cost, while the EUR oil mix generally declined across its acreage."
Separately, 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 multiple strengths, 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, compelling growth in net income, good cash flow from operations, solid stock price performance and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows: