10 Deep Value Stocks to Buy Now

3. SM Energy Company (NYSE:SM)

Fwd. P/E: 4.1

Dividend Yield: 2.9%

Number of Hedge Fund Holders: 38

SM Energy Company (NYSE:SM) is an oil and gas exploration and production company with operations in the Permian Basin and the South Texas Eagle Ford region.

The company’s long-term strategy is centered on generating free cash flow and returning capital to shareholders through debt reduction and share repurchases. Additionally, it focuses on high-margin production growth and cost-efficient resource development. In its Q4 2024 earnings report, SM Energy Company (NYSE:SM) posted strong production results, with Q4 production volumes reaching 208 thousand barrels of oil equivalent per day (MBoe/d), marking a 22% sequential increase. For the full year 2024, production rose 12% compared to 2023, and the company generated $485 million in adjusted free cash flow. Looking ahead, management has provided guidance for net production volumes to range between 200-215 MBoe/d.

Although Q4 results were solid, the outlook was not as strong, according to Raymond James analyst John Freeman. In his March 10 report, he projected weaker oil prices in the near term, leading him to lower his price target on SM Energy Company (NYSE:SM) from $59 to $40. However, he maintained an Outperform rating on the stock. Conversely, in late February, Roth MKM analyst Leo Mariani reiterated a Buy rating on the shares, setting a price target of $50, representing a potential upside of 72%.