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Here's Why SM Energy (SM) Gained But Lagged the Market Today

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The latest trading session saw SM Energy (SM - Free Report) ending at $39.97, denoting a +0.4% adjustment from its last day's close. The stock's change was less than the S&P 500's daily gain of 0.42%. At the same time, the Dow added 0.04%, and the tech-heavy Nasdaq gained 0.38%.

Coming into today, shares of the independent oil and gas company had lost 12.76% in the past month. In that same time, the Oils-Energy sector lost 2.47%, while the S&P 500 gained 2.06%.

The investment community will be closely monitoring the performance of SM Energy in its forthcoming earnings report. The company is expected to report EPS of $1.62, down 6.36% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $673.01 million, up 5.01% from the year-ago period.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $7.08 per share and a revenue of $2.78 billion, signifying shifts of +20.2% and +17.06%, respectively, from the last year.

Investors should also pay attention to any latest changes in analyst estimates for SM Energy. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 6.45% downward. SM Energy is currently a Zacks Rank #3 (Hold).

With respect to valuation, SM Energy is currently being traded at a Forward P/E ratio of 5.62. For comparison, its industry has an average Forward P/E of 10.05, which means SM Energy is trading at a discount to the group.

The Oil and Gas - Exploration and Production - United States industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 212, putting it in the bottom 17% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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