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SM Energy Stock: The Reaction after Past Earnings Beats


Aug. 9 2016, Updated 10:05 a.m. ET

SM Energy’s stock price action following 2Q16 earnings

SM Energy (SM) announced its 2Q16 earnings on August 2, 2016, after the Market closed. That day, SM stock rose ~4.1% to close at $26.21.

It’s worth noting that in the three months leading up to the earnings release, SM stock fell ~13%, mainly due to the ~12% decrease in crude oil (USO) (UWTI) (DWTI) prices during the same period.

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SM Energy’s stock price trend

After losing ~92% of its market capitalization from September 2014 to February 2016, SM Energy (SM) stock is finally showing signs of a new uptrend. In April 2016, the stock crossed its 200-day moving average for the first time in a year and is currently trading ~11% above that. Since the stock bottomed out in February 2016, it has risen a whopping ~276%.

SM Energy’s 2016 relative performance

For 2016, SM Energy is outperforming larger upstream companies from the S&P 500 (SPY). SM has risen ~34%, and larger oil and gas producers such as Devon Energy (DVN), Occidental Petroleum (OXY), and EOG Resources (EOG) have risen ~14%, ~11%, and ~12%, respectively.

SM stock price after past earnings beats

In the last six quarters, SM Energy beat earnings expectations twice, in 1Q16 and 2Q15. It reported its 1Q16 earnings after the Market closed on May 3, 2016. Excluding the one-time items, the reported loss was $0.83 per share, which was $0.03 better than the consensus expectation of a loss of $0.86 per share. Following the earnings release, in a contrarian reaction, better-than-expected earnings saw SM stock fall ~7% in three sessions.

In 2Q15, SM stock reacted positively, rising ~12% in one session. It was 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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