SM Energy (NYSE: SM) went under the radar among President Donald Trump’s stock purchases in the first quarter of 2026. However, the oil producer has posted rather notable gains since the president added it to his portfolio.
More precisely, SM shares are up 76% since January 26 when the trade was disclosed, and are now up 79% year-to-date, trading at $34.32 at press time.
As can be guessed, the rally came amid a sharp rebound in energy stocks, driven by rising crude prices. Further optimism came as a result of SM Energy’s Civitas merger and cash flow outlook.
Analysts now point to accelerating production growth, debt reduction efforts, and improving shareholder returns as other key catalysts, with some, such as Raymond James, arguing SM Energy is one of the biggest beneficiaries of the current geopolitical situation.
SM Energy has plenty more room to run, Raymond James claims
Notably, Raymond James upgraded its SM Energy rating from ‘Underperform’ to ‘Outperform’ on May 20, raising the target to $55 on improving fundamentals and a stronger-than-expected oil price backdrop.
As mentioned, the firm highlighted SM Energy as one of the best candidates to profit from the recent surge in oil prices, despite the stock’s already strong performance.
A key part of the bullish thesis centers on balance sheet improvement. Specifically, the independent oil producer has reduced absolute debt by approximately $700 million following the merger, and management expects leverage to fall below 1x by the fourth quarter.
Raymond James also pointed to upcoming shareholder returns, noting that SM Energy plans to initiate share buybacks in the second quarter of 2026, supported by strengthening free cash flow generation in the second half of the year.
As a result, further upside could emerge if the company continues executing on its deleveraging path while maintaining production momentum through 2026 and 2027.
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