Headquartered in Oklahoma City, Devon Energy Corporation (DVN) is an independent energy company with a robust oil and natural gas presence. With a market cap of $24.6 billion, Devon Energy specializes in the exploration, development, and production of oil and natural gas assets primarily across the U.S.
Devon Energy has significantly underperformed the broader market over the last year. The stock has declined 14.3% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 35.8%. In 2024 alone, DVN stock lost 11.7%, compared to the SPX, which is up 24.3% on a YTD basis.
Narrowing the focus, DVN’s underperformance looks less pronounced in comparison to the iShares U.S. Oil & Gas Exploration & Production ETF (IEO). The exchange-traded fund has marginally gained on a YTD basis compared to DVN’s double-digit loss for the period.
Devon Energy has underperformed the broader market and has lagged behind its peers due to a combination of factors, including declining oil prices, increased competition, and operational challenges. However, on Nov. 5, Devon Energy reported its mixed Q3 earnings, and the stock gained marginally and edged up by 1.7% in the next trading session. Its total revenue rose 4.9% year over year to $4.02 billion, but Q3 profit fell by 10.8% to $812 million.
Moreover, Devon Energy has raised its Q4 production forecast to 811,000 to 830,000 Boe per day range, driven by its Williston Basin acquisition, with a capital outlook midpoint of $950 million to support growth initiatives.
For the current fiscal year, ending in December 2024, analysts expect DVN’s EPS to decline by 13.7% year over year to $4.93 on a diluted basis. The company's earnings surprise history is robust. It beat the consensus estimate in each of the last four quarters.
Among the 25 analysts covering DVN stock, the consensus rating is a “Moderate Buy.” That’s based on 14 “Strong Buy” ratings, two “Moderate Buys,” and nine “Holds.”
This configuration is slightly less bullish than three months ago, with 15 suggesting a “Strong Buy.”
On Nov. 6, Stephen Richardson from Evercore ISI maintained a ‘Hold’ rating on Devon Energy, with a price target of $50, implying a potential upside of 24.9% from current levels. However, Paul Cheng from Scotiabank maintained a ‘Buy’ rating on Devon Energy with a price target of $60.
The mean price target of $52.42 represents a 31% premium to DVN’s current price levels. The Street-high price target of $68 suggests an upside potential of 69.9%.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
