SM: Post 1Q26 Adjustments—Integration Execution Running Ahead of Plan; Raising PT

Research evidence excerpt

SM: Post 1Q26 Adjustments—Integration Execution Running Ahead of Plan; Raising PT

Equity Research

Price Target Change — May 17, 2026

Exploration & Production

SM Energy Company

Post 1Q26 Adjustments—Integration Execution Running Equal Weight

Ahead of Plan; Raising PT Price Target: $32.00

Notable Changes

Our Call $ (Dec) Current Prior % Chg

SM delivered one of the stronger 1Q26 updates in the group, with raised FY26 Price Target $32.00 $29.00 10.3%

production guidance, accelerating synergy capture, and flat FY26 capex supporting EPS 2026 7.19 6.76 6.3%

improved capital efficiency and clearer visibility on a 2H26 FCF inflection. Maintain EW. EPS 2027 7.03 6.11 15.0%

Rev. (MM) 2026 6.98B 7.04B -0.9%

Updated FY26 Guide. Mgmt raised FY26 production guide to 410-430 mboe/d Rev. (MM) 2027 7.01B 6.86B 2.2%

(222-228 mbbl/d oil), reflecting stronger-than-expected well productivity and early

benefits from synergy capture following the CIVI integration. Importantly, capex was Ticker SM

reaffirmed at $2.65–$2.85bn, highlighting improving capital efficiency with activity levels

Upside/(Downside) to Target (1.8)%held consistent with the original plan. Mgmt now expects a ~430 mboe/d 2H26 run-rate

(~238 mbbl/d oil), pointing to continued momentum through the year. Price (05/15/2026) $32.59

52 Week Range $17.45 - 33.25

Production Trajectory & Activity Cadence. SM’s updated outlook implies a front-end Market Cap (MM) $6,485

loaded capital cadence alongside a rising oil production trajectory into 2H. The 2Q guide Enterprise Value (MM) $8,413

of 435-450 mboe/d (228-235 mbbl/d) marks a step-up from 1Q, reflecting a full- Average Daily Value (MM) $199

quarter CIVI contribution, partially offset by the S. TX sale (closed 4/30). While 2Q likely Dividend Yield 2.7%