With a market cap of $25.7 billion, Devon Energy Corporation (DVN) is an independent energy company. Based in Oklahoma, it focuses on exploring, developing, and producing oil, natural gas, and natural gas liquids within key U.S. basins, including Delaware, Eagle Ford, Anadarko, Williston, and Powder River. The company is slated to announce its fiscal Q3 earnings results after the market closes on Tuesday, Nov. 5.
Ahead of this event, analysts expect DVN to report a profit of $1.10 per share, a 33.3% decline from $1.65 per share in the year-ago quarter. However, the company has consistently exceeded Wall Street's earnings expectations in the past four quarters. DVN exceeded the consensus EPS estimate by a 9.3% margin in the most recent quarter.
For fiscal 2024, analysts expect DVN to report EPS of $5, marking a decline of 12.4% from $5.71 in fiscal 2023. Nevertheless, EPS is expected to rebound in fiscal 2025, anticipating a 6.8% year-over-year growth, reaching $5.34.
In 2024, shares of Devon Energy have lagged behind the broader markets, falling 10.2%, while the broader S&P 500 Index ($SPX) has gained nearly 23%, and the Energy Select Sector SPDR Fund (XLE) has returned 7.8% on a YTD basis.
Shares of Devon Energy rose 2.8% following its Q2 earnings release on Aug. 6, primarily due to stronger-than-expected adjusted EPS of $1.41, driven by higher production volumes and efficient cost management. The company also raised its full-year 2024 production guidance without increasing capital expenditures, highlighting operational efficiency. Additionally, Devon's share repurchase program expansion by 67% to $5 billion, coupled with strong free cash flow, boosted investor confidence. However, the stock slumped in September due to a 7.3% decline in oil prices, driven by concerns over potential increased OPEC production and a global economic slowdown, which threatened its cash flow.
Analysts' consensus view on DVN stock remains cautiously optimistic, with a "Moderate Buy" rating overall. Out of 25 analysts covering the stock, 14 recommend a "Strong Buy," two "Moderate Buys," and nine give a "Hold" rating. This configuration is slightly less bullish than three months ago, with 15 analysts suggesting a "Strong Buy." The average analyst price target for DVN is $52.96, suggesting a potential upside of 30.3% from the current levels.
On the date of publication, Sohini Mondal 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.
