Capital One Lowers SM Energy EPS Projections for FY2025

Capital One Financial has revised its earnings per share (EPS) estimates for SM Energy Company (NYSE: SM) for the fiscal year 2025. In a note issued to investors on November 17, analyst B. Velie projected that the energy company will earn $5.59 per share, a slight decrease from the previous estimate of $5.61. This adjustment contrasts with the current consensus estimate for SM Energy’s full-year earnings, which stands at $8.10 per share.

In addition to the FY2025 estimate, Capital One Financial provided projections for upcoming quarters. The firm anticipates earnings of $1.00 for Q4 2025, $1.02 for Q2 2026, $1.08 for Q3 2026, $1.19 for Q4 2026, and $4.70 for FY2027.

Several other financial institutions have also recently adjusted their ratings and price targets for SM Energy. Zacks Research upgraded the company’s stock from a “strong sell” to a “hold” rating on November 3. Mizuho set a price objective of $38.00 in a report issued on October 10. Meanwhile, Royal Bank of Canada raised its target price from $34.00 to $35.00 and assigned a “sector perform” rating on October 9. Conversely, Wells Fargo & Company reduced its price target from $30.00 to $23.00, maintaining an “equal weight” rating in a note dated October 17. Lastly, Susquehanna lowered its price target to $27.00 and issued a “neutral” rating on October 20.

Analyst opinions on SM Energy vary, with one research analyst rating it as a “Strong Buy,” three assigning a “Buy” rating, seven issuing a “Hold” rating, and one giving it a “Sell” rating. According to MarketBeat, the average rating for SM Energy is “Hold,” with an average price target of $36.64.

Recent Performance and Market Reaction

On Wednesday, shares of SM Energy opened at $18.43, reflecting a decline of 3.2%. The company has a market capitalization of $2.11 billion and a price-to-earnings ratio of 2.60. Over the past year, SM Energy has seen a low of $17.58 and a high of $46.42. The stock has a 50-day moving average price of $22.50 and a 200-day moving average price of $24.81. The company’s current ratio is 0.69, with a quick ratio also at 0.69 and a debt-to-equity ratio of 0.59.

SM Energy recently reported its earnings results on November 3, revealing an EPS of $1.33 for the quarter. This figure exceeded analysts’ expectations of $1.25 by $0.08. The company’s revenue for the quarter was $811.59 million, though this fell short of the consensus estimate of $838.24 million. Year-over-year, SM Energy’s revenue increased by 26.1%, despite a decline in EPS compared to $1.62 in the same quarter last year.

Institutional Investment Trends

Recent trading activity indicates significant interest from institutional investors in SM Energy. Vanguard Group Inc. increased its stake by 0.5% in the first quarter, now holding 15,269,443 shares worth $457.32 million after acquiring an additional 69,933 shares. Similarly, Dimensional Fund Advisors LP grew its stake by 0.5% in the third quarter, holding 5,921,769 shares valued at $147.88 million. American Century Companies Inc. enhanced its position by 8.9%, acquiring 375,754 shares, bringing its total to 4,585,624 shares worth $114.50 million.

Other notable institutional movements include Westwood Holdings Group Inc., which increased its stake by 16.3% in the second quarter, and Geode Capital Management LLC, which raised its holdings by 0.7%. Currently, approximately 94.56% of SM Energy’s stock is owned by hedge funds and institutional investors.

The company also declared a quarterly dividend of $0.20, which was paid on November 3 to shareholders of record as of October 17. This annualized dividend represents $0.80 with a yield of 4.3%, and the payout ratio stands at 12.62%.

SM Energy, based in Texas, focuses on the acquisition, exploration, development, and production of oil, gas, and natural gas liquids. It has significant working interests in the Midland Basin and South Texas, continuing to play a vital role in the energy sector.