SM Energy (SM)
Price target: Unlock
Second PT: Unlock
Oil is hot in 2026 as the U.S. expands its dominance in the global oil market through its strategic move on Venezuela. Whether your agree with the move or not, it’s outcome has sparked a massive rally in big oil stocks like Exxon and Chevron, but it’s not just the popular names gaining attention. Other oil companies like Occidental, Valero, Devon…etc. have also gained.
While many of these names have already rallied to new 12 months highs, there are still smaller companies that are still basing out. SM Energy is a good example of this...$SM is a mid-cap U.S. exploration and production company focused on oil and gas development. Although the company is not exposed to the Venezuela opportunity, it still operates in a steady area of the U.S.
A recent win for the company is the successful merger with Civitas Resources, which expanded the SM’s asset base by roughly 823,000 net acres across U.S. share basics, especially the Permian Basin. This gives the company higher production capacity and revenue potential. The numbers already project that increased revenue, with 2026 expected to double in sales. The real pressure however remains on profit…the company’s expensive industry, commodity price sensitivity, and merger costs have weighed on margins, but management is committed to a turnaround plan through 2028 bring back profits and expand free cash flow.
As for its valuation, $SM trades at a $5.5 billion valuation, leaving it at 0.77x P/S and 3.9x P/E. This is extremely low compared to other names in its industry. The oil & gas production and exploration industry typically trades around 15-17x P/E. That could mean $SM is an opportunity for investors who believe in the company’s turnaround plan and are patient enough for them to see it through. We’ll be starting with a small position and scaling up depending on performance and future earnings.
Please note that the stock includes risks and price targets are subject to change based on market developments and company updates. These stocks usually take time to come around. Wanna see real-time market updates? Learn more here.
Darden Restaurants (DRI)
Price target: Unlock
Second PT: Unlock
The economy may be struggling, credit card debt is ballooning, and inflation is hitting consumers hard, but there’s one industry that seems to be unfazed, the large-chain restaurant industry.
Darden Restaurants, the operator of over 2000 well-known restaurants like Olive Garden, LongHorn Steakhouse, Ruth’s Chris, Yard House…and more, has posted consistent revenue growth over the past three years, and it didn’t happen accidentally. The company positioned itself to remain competitive by pricing their items below food inflation pricing, which helped attract low to middle class consumers during the high inflation period. Deals and a slim menu has also kept people coming back. The downside of this is thinning margins, but Darden uses its scalability to its advantage and remains profitable.
Looking ahead, Darden guides to open 65-70 new restaurants in 2026, while also mixing in their fine dining brands…which drive higher returns. The company is also expanding into digital ordering and delivery by partnering with Uber to broaden nationwide delivery coverage. Darden’s future outlook is also supported by growth in same store sales (typically a very positive sign for a consumer facing business).
Risks:
It’s not cheap to run a restaurant and it’s usually a very sensitive to consumer spending. If consumers do decide to pullback on dining, then Darden will face a challenging period. Other areas of pressure include cost inflation. Darden isn’t a high growth compounder, but they do make a decent hold for exposure to consumer spending habits.
Stock Name - Unlock
You've reached the end of our complimentary public watchlist. Unlock for the full list by becoming a member of our Hyper Stocks community. Click here to unlock more high probability set-ups!
Stock Name - Unlock
You've reached the end of our complimentary public watchlist. Unlock for the full list by becoming a member of our Hyper Stocks community. Click here to unlock more high probability set-ups!
Stock Name - Unlock
You've reached the end of our complimentary public watchlist. Unlock for the full list by becoming a member of our Hyper Stocks community. Click here to unlock more high probability set-ups!
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice. Investing involves risk, including the possible loss of capital. Always conduct your own research or consult with a licensed financial advisor before making investment decisions.
Hyper Stocks and its contributors may hold positions in some of the securities or assets mentioned above. These positions are subject to change without notice. Any opinions expressed reflect current views at the time of writing and are not guarantees of future performance. Past performance does not guarantee future results.