10 Cheapest Oil and Gas Stocks to Invest in

4. SM Energy Company (NYSE:SM)

Forward P/E: 7.91

Potential Upside: 89.63%

Number of Hedge Fund Holders: 44

On January 5, Tim Rezvan of KeyBanc maintained his Buy rating on SM Energy Company (NYSE:SM) stock, along with a target price of $28. The rating suggests another 55% upside from current levels. Mizuho also changed its outlook on January 9, lowering the price target to $34 from $38, but remained bullish despite the downward revision.

Analysts continue to reconsider their opinions on the stock in the backdrop of the SM Energy and Civitas Resources (NYSE:CIVI) merger. The merger is an all-stock transaction, valued at $12.8 billion, and was first announced in November 2025. Analysts like those at KeyBanc were initially sceptical of the deal; however, they did not shy away from maintaining a bullish stance on the stock

Even though Wall Street maintains price targets as high as $60 for SM Energy, it is quite likely that the upside will stay limited until the merger goes through. Post-merger, rapid deleveraging and improved free cash flow generation will support the bullish thesis for the stock, according to KeyBanc.

SM Energy Company (NYSE:SM) is an oil and gas exploration company with headquarters in Denver, Colorado. It mainly focuses on activities within the US and is known for operating in high-quality resource areas.