SM Energy falls on lower oil production guidance despite Q3 beat

Susquehanna reduced its price target on SM Energy (NYSE:SM) to $33 from $44, citing trimmed 2026 oil production guidance. The company reported Q3 results in line with expectations, with adjusted EPS of $1.95 and revenue of $2.16 billion. SM Energy narrowed its capital expenditure guidance to $2.75 billion and plans to accelerate buybacks as it targets low leverage by year-end.

SM Energy Co reported Q3 2026 oil production at 230,000 barrels per day, 2% below guidance due to downtime and constraints. Full-year cash taxes are now expected at $100M-$120M. The company expects $400M in synergies, with $50M included in 2026. CEO Beth McDonald confirmed production and capital plans for 2027, noting inflationary pressures. CFO Wade Pursell discussed hedging strategy and cash taxes. COO Blake McKenna highlighted operational improvements and cost savings.

SM Entertainment reported a 9% revenue decline to 291.1 billion KRW ($205.2 million) and a net loss of 1.1 billion KRW ($775,000) for Q3, citing lower music sales and concert revenue. Operating profit fell 26% YoY. The company attributed the loss to foreign exchange rates and a 70% drop in new album sales, though MD/licensing revenue rose 23.5% YoY.

SM Energy reported Q3 2026 production of 433,000 barrels of oil equivalent per day, with oil production at 230,000 barrels per day, 2% below midpoint guidance. Downtime and takeaway constraints reduced oil volumes by 4,000 barrels per day. Q4 oil production is expected to range from 229,000 to 239,000 barrels per day. The company reported $1.1 billion in operating cash flow, $1.3 billion in adjusted EBITDAX, and $397 million in adjusted free cash flow.

SM Energy reported 3Q 2026 revenue of $2.17B, net income of $93M, and EPS of $0.39. This compares to $812M, $155M, and $1.35 a year earlier. Production averaged 433.1 MBOE per day, down 2% sequentially. The company expects $2.75B in 2026 investments, focused on oil and liquids-rich development.

SM Energy reported Q3 2026 operating cash flow of $1.12B, more than double the prior year, driven by its Civitas Resources merger. Adjusted earnings rose to $465M, but GAAP net income fell due to derivative losses. Production averaged 433,100 boe/d, with oil output unchanged from Q2. The company achieved $400M in annualized merger synergies, exceeding targets, and reduced net debt to $6B.