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Mizuho Reduces Target Price on SM Energy (SM) to $31, Following Q4 Earnings Release

SM Energy Company (NYSE:SM) is one of the 14 Most Undervalued NYSE Stocks to Buy According to Analysts.

Mizuho, on February 26, reduced its target price on SM Energy by 8.8% to $31 (from $34). Despite the price target cut, the firm retained its Outperform call on the stock. This update comes a day after SM Energy released its Q4 and full-year 2025 earnings on February 25.

SM Energy, in the 4th quarter, delivered diluted adjusted earnings per share of $0.83, which is just a tick below the street consensus estimate of $0.85. This print represents a ~57% YoY drop vs. Q4 2024 and was driven primarily by lower global oil and gas prices, combined with flat net production volume. Despite this large drop, adjusted free cash flow to the firm increased slightly YoY due to significantly lower CapEx spend.

Moving forward in 2026, the company plans to continue this strategy of focusing on value (through disciplined capital investments and greater focus on higher-margin products/commodities), rather than on volume, to maximize free cash flows.

The company is also looking to capture the value-accretive synergies over the next two years from its merger with Civitas (which closed on January 30). Management has already identified $200 million in annual cost synergies, ~80% of which have been actioned. They also believe that they can extract an additional $100 million in annual savings.

The additional free cash flows from these initiatives, combined with the $950 million proceeds from the company’s divestiture of certain South Texas assets (which Stephens thinks is “positive”), will be used to enhance the company’s return of capital program and accelerate its debt reduction.

SM Energy Company (NYSE:SM) is an energy company engaged in the acquisition, exploration, development, and production of oil, gas, and natural gas liquids. The company is based in Denver, Colorado, and was founded in 1908.

While we acknowledge the potential of SM to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than SM and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 13 Deep Value Stocks to Buy Right Now and 14 Best Consumer Discretionary Stocks to Buy Right Now.

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When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

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  • 175 Teslas
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  • 140 Metas
  • 84 Googles
  • 65 Microsofts
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  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
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