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What to Expect from SM Energy’s Upcoming 2Q16 Earnings

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Part 7
What to Expect from SM Energy’s Upcoming 2Q16 Earnings PART 7 OF 7

How SM Energy’s Stock Price Reacted to Past Earnings

SM Energy’s stock price action

After losing ~92% of its market capitalization from September 2014 to February 2016, SM Energy’s (SM) stock price is finally showing signs of a new uptrend.

In April 2016, SM Energy’s stock crossed the 200-day moving average for the first time in last one year and currently, trading ~10% above it. Since its February 2016 bottom, SM Energy’s stock price is up by a whopping ~287%.

How SM Energy’s Stock Price Reacted to Past Earnings

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SM Energy’s relative performance

Recently, SM has shown better relative strength when compared with other crude oil (USO) and natural gas (UNG) producers. In the last three months, SM Energy’s stock price has increased by ~4%.

Compare this with the SPDR S&P Oil and Gas Exploration & Production ETF (XOP), which is up by ~2% during the same period.

SM Energy’s year-to-date performance

For 2016, SM is underperforming other smaller upstream companies. In 2016, SM is up by ~36%. Among the other smaller oil and gas producers, Parsley Energy (PE), Continental Resources (CLR), and WPX Energy (WPX) are up by ~52%, ~99%, and ~71%, respectively.

SM Energy’s stock price performance after past earnings

SM Energy reported its 1Q16 earnings after the Market closed on May 3, 2016. In 1Q16, excluding the one-time items, SM Energy (SM) reported a loss of $0.83 per share, $0.03 better than the consensus for a loss of $0.86 per share.

Following the earnings release, in a contrarian reaction, better-than-expected earnings saw SM Energy’s stock price decrease by ~7% in the three sessions.

SM reported its 4Q15 earnings after the Market closed on February 23, 2016. In 4Q15, excluding the one-time items, SM reported a loss of $0.90 per share, $0.33 lower than the consensus for a loss of $0.57 per share.

Following the earnings release, a contrarian reaction was observed where worse-than-expected earnings saw SM Energy’s stock price increase by ~125% in the eight sessions.

Similar contrarian reactions were observed after 3Q15 and 1Q15 earnings also, when SM Energy’s stock price increased by ~22% and 3% in seven and five sessions, respectively. This occurred even after missing the consensus earnings estimates by $0.05 per share and $0.16 per share, respectively.

For its 2Q15 earnings, SM Energy’s stock price reacted positively with an increase of ~12% in one session, mainly due to the $0.54 per share beat on the earnings estimates. But considering the magnitude of the beat, the reaction was still muted.

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