Devon Energy Faces Market Challenges Amid Mixed Performance Indicators

Oklahoma City-based Devon Energy Corporation (DVN) is engaged in the exploration and production of oil, natural gas, and natural gas liquids. With a market capitalization of $20.2 billion, the company operates in key regions across North America, including the Delaware Basin, Eagle Ford, Anadarko Basin, and Williston Basin.

Subpar Performance Compared to Market

Over the past year, Devon has notably underperformed the broader market. The company’s stock price plummeted by 37.5% in 52 weeks and decreased by 3.9% year-to-date (YTD). In contrast, the S&P 500 Index ($SPX) witnessed a 12.3% surge over the same period, despite a 3.3% decline YTD.

Industry Benchmark Comparison

Looking more closely at industry standings, Devon’s performance surpasses that of the iShares U.S. Oil & Gas Exploration & Production ETF (IEO), which declined by 18.7% over the past year. However, Devon’s stock has outperformed IEO’s 6.5% dip YTD.

Recent Earnings Report

Devon Energy’s stock experienced a 7.7% increase following the release of its better-than-expected Q4 results on February 18. The company achieved record production levels during the quarter, with oil-equivalent barrels per day production rising nearly 16% year-over-year to 848,000. This boost was largely influenced by the Grayson Mill acquisition completed in late September. Devon’s total revenue for the quarter climbed by 6.2% year-over-year to $4.4 billion, exceeding analyst expectations by 3.9%. Additionally, its non-GAAP earnings per share (EPS) rose 5.5% year-over-year to $1.16, surpassing consensus estimates by 16%.

Future Earnings Projections

For fiscal year 2025, which concludes in December, analysts forecast a 10% decline in earnings to $4.34 per share. Nevertheless, Devon has a history of positive surprises, having exceeded bottom-line estimates in each of the past four quarters.

Analyst Ratings and Price Targets

Currently, DVN holds a “Moderate Buy” consensus rating. Out of 25 analysts covering the stock, 16 recommend “Strong Buys,” two suggest “Moderate Buys,” and seven recommend “Holds.” This recommendation mix has remained stable in recent months.

On April 23, Barclays (BCS) analyst Betty Jiang reasserted an “Equal Weight” rating on DVN while reducing the price target from $44 to $38. Based on the mean price target of $43.32, there is a potential 37.8% upside from current levels. However, the highest target of $66 suggests a notable 109.9% upside potential.

On the date of publication, Aditya Sarawgi 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.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.