SM Energy Q2 net income surges, raises second-half production outlook

The current average analyst rating on the shares is buy, with 9 strong buy or buy ratings, 6 hold ratings and no sell or strong sell ratings.

The average consensus recommendation for the oil and gas exploration and production peer group is buy. Wall Street's median 12-month price target for SM Energy Co is $36.50, about 17.6% above its Aug. 4 closing price of $31.05.

The stock recently traded at 4 times next 12-month earnings, versus a P/E of 5 three months ago.

• Merger synergies - The company said 95% of targeted merger-related synergies, totaling $355 million, were actioned in the quarter, helping lower recurring general and administrative costs.
• Asset sale gain - SM Energy recognized an estimated $262 million gain on the sale of South Texas assets, which also contributed to debt reduction.
• - Second-quarter oil production averaged and realized oil prices rose year over year to before hedges.