Oklahoma City-based Devon Energy Corporation (DVN) explores and produces oil, natural gas, and natural gas liquids. With a market cap of $20.2 billion, Devon’s operations span the Delaware Basin, Eagle Ford, Anadarko Basin, Williston Basin, and other regions in North America.
The energy giant has significantly underperformed the broader market over the past year. Devon’s stock prices have tanked 37.5% over the past 52 weeks and 3.9% on a YTD basis, compared to the S&P 500 Index’s ($SPX) 12.3% surge over the past year and 3.3% dip on a YTD basis.
Narrowing the focus, Devon has underperformed the industry-focused iShares U.S. Oil & Gas Exploration & Production ETF’s (IEO) 18.7% decline over the past 52 weeks, while outperforming IEO’s 6.5% drop on a YTD basis.
Devon Energy’s stock prices soared 7.7% after the release of its better-than-expected Q4 results on Feb. 18. It delivered record levels of production during the quarter, Devon’s oil-equivalent barrels per day production increased nearly 16% year-over-year to 848,000, this figure was primarily impacted by the Grayson Mill acquisition which was closed in late-September. Its overall topline for the quarter grew 6.2% year-over-year to $4.4 billion, exceeding the Street’s expectations by 3.9%. Meanwhile, its non-GAAP EPS increased 5.5% year-over-year to $1.16, surpassing the consensus estimates by an impressive 16%.
For the current fiscal 2025, ending in December, analysts expect DVN to report a 10% year-over-year decline in earnings to $4.34 per share. However, the company has a solid earnings surprise history. It has surpassed the Street’s bottom-line estimates in each of the past four quarters.
DVN holds a consensus “Moderate Buy” rating overall. Of the 25 analysts covering the stock, opinions include 16 “Strong Buys,” two “Moderate Buys,” and seven “Holds.”
This configuration has been mostly stable in recent months.
On Apr. 23, Barclays (BCS) analyst Betty Jiang reiterated an “Equal Weight” rating on DVN, while lowering the price target from $44 to $38.
DVN’s mean price target of $43.32 indicates a 37.8% premium to current price levels, while its Street-high target of $66 suggests a staggering 109.9% upside potential.
