- SM Energy (SM +12.5%) shoots higher despite missing estimates for Q4 earnings and revenues, as investors focus on SM's outlook for higher production even while cutting 2015 capital spending by 43% Y/Y to $1.2B.
- SM anticipates FY 2015 production of 165K-174K boe/day, which represents 12% Y/Y growth; Q1 2015 is seen essentially flat Q/Q, with production declining ~1% per quarter for the rest of the year due to the reduction in rig activity and deferral of well completions throughout the year.
- UBS raises its stock price target to $48 from $41, estimating SM will generate a "manageable" free cash flow deficit of ~$210M, narrower than 2014's $440M funding gap, and seeing SM's debt-to-EBITDA ending 2015 at 2.2x, below the current oily resource E&P average of 3x (Briefing.com).