SM Energy has gotten a big boost from an increase in oil prices tied to the Iran war, but there's still more room for shares to run, according to Raymond James. The investment bank upgraded the energy name to outperform from underperform. It also put a $55 price target on shares, implying 60% upside from Tuesday's close. "SM has been one of the biggest beneficiaries of the oil move post the Iran war and, despite the run the stock has had, our bullish oil outlook relative to current strip still provides plenty of upside potential," analyst John Freeman said in a note to clients. The oil and gas stock has jumped 84% this year, following crude prices higher as the U.S.-Iran war raised crude supply concerns. West Texas Intermediate futures are up 76% in 2026. They last traded around $100 per barrel after starting the year near $57. SM YTD mountain Shares have risen 84% in the year to date. Regardless of whether the Middle East war ends soon, SM Energy is already set up for more upside due to its recent "oil-driven cash flow windfall," according to Raymond James. "The oil-driven cash flow windfall has allowed the company to clean its balance sheet post-merger close (which prior to recent debt reduction was another significant negative relative to peers)," Freeman wrote, referring to SM Energy's merger with exploration and production firm Civitas Resources in January. He noted that the company has reduced its absolute debt by roughly $700 million. "As a result, we see leverage falling below 1x by 4Q (and even earlier under our oil outlook)," Freeman added. Raymond James' call goes against consensus on Wall Street. Of the 14 analysts covering SM Energy, six have a buy or strong buy on the stock, while seven have a hold on shares, LSEG data shows.
