SM Energy upgraded at Baird following positive Permian update

SM Energy (SM -1%) is upgraded to Outperform from Neutral with a $110 price target, up from $88, at Robert W. Baird following SM's positive Permian update and disclosure of an additional 53.5K net acres in the play.

Baird now believes shares should trade more in line with its Permian-focused peers on an EV/EBITDA basis; they currently trade at a 46% discount, the firm says.

SM has built critical scale in the basin and given peer activity, the firm is confident that successful de-risking will drive multiple expansion over the next 12 months.

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