Investing.com - Raymond James downgraded SM Energy (NYSE: SM ) stock rating to Underperform from Outperform on Tuesday, citing expectations of lower oil prices and inventory concerns. For a comprehensive analysis of SM Energy’s financial health and valuation metrics, investors can access detailed reports on InvestingPro .

The downgrade reflects Raymond James’ belief that oil prices could settle around $60 per barrel for an extended period as geopolitical risk premiums unwind, unless geopolitical risks resurface or OPEC changes course. The firm identified SM Energy as among the highest beta oil stocks in its coverage universe, making it particularly sensitive to oil price movements. Investors looking to analyze oil stock sensitivity and market correlations can utilize InvestingPro’s advanced screening tools and peer comparison features.

Raymond James highlighted SM Energy’s below-average core inventory life in the Permian Basin as a key concern, noting this puts "increasing pressure on the Uinta to fill the gap." The firm observed that SM trades at similar multiples to other small and mid-cap oil peers with comparable leverage profiles.

SM Energy has maintained most of its 2025 guidance, with the exception of lease operating expenses (LOE). The company’s 2025 capital plan includes operating three rigs and one crew in the Uinta Basin with 35 drills and 50 completions planned, while its Midland Basin operations will also utilize three rigs and one crew with 40 drills and 60 completions.

For its South Texas operations, SM Energy plans to run one rig and one crew with 30 drills and 40 completions in 2025. The company’s Midland program assumes four rigs into the summer before ending the year with three, while the South Texas program anticipates one or two rigs throughout the year, and the Uinta program projects three rigs into the fall before concluding with two. To track SM Energy’s operational metrics and compare them with industry peers, consider exploring InvestingPro’s comprehensive financial dashboard and real-time updates.

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