SM Energy upgraded to Buy from Neutral at Roth Capital

Roth Capital analyst Leo Mariani upgraded SM Energy (SM) to Buy from Neutral with a price target of $32, up from $30. The firm upgraded a handful of exploration and production names, saying oil prices are close to a near-term bottom with a potential Iran ceasefire “seeming tenuous.” A bunch of oil-focused E&P stocks have pulled back by 15%-25% from year-to-date highs and are more attractive at current levels, the analyst tells investors in a research note. Roth sees lasting damage to key Middle East oil infrastructure and expects more oil can start transiting the Strait of Hormuz, but thinks this is priced into stocks. Near-term oil prices of $75 per barrel are likely to stabilize going forward, the firm contends.

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