EU and US could reach trade deal this weekend - Reuters
On Thursday, Bernstein SocGen Group adjusted its outlook on Devon Energy (NYSE: NYSE:DVN), increasing the stock’s price target from $45.00 to $48.00 and maintaining an Outperform rating. The revision follows Devon Energy’s fourth-quarter earnings report, which surpassed expectations, primarily due to a significant rise in realized gas prices. According to InvestingPro data, analyst targets for Devon Energy currently range from $43 to $67, with 8 analysts recently revising their earnings estimates upward. The stock appears slightly undervalued based on InvestingPro’s Fair Value analysis.
Devon Energy reported a 13% beat on adjusted earnings per share for the fourth quarter of 2024 compared to consensus estimates. This performance was attributed to a higher realized gas price, which at $1.46 was well above the $0.98 consensus. The company also emphasized a record level of production and successful cost synergies following the integration of Grayson Mill. Additionally, Devon Energy noted the potential for increased revenue from associated gas, with expectations for gas revenues to more than double year-over-year. With a market capitalization of $24.7 billion and trailing twelve-month EBITDA of $7.3 billion, Devon Energy maintains strong financial metrics. InvestingPro analysis reveals the company’s robust financial health score of 2.85 (GOOD), supported by attractive valuation metrics including a P/E ratio of 6.97x.
Investors showed a positive reaction to the company’s 2025 guidance, which promises a slight increase in production by 2% over previous estimates. Furthermore, the company has set an ambitious target of returning up to 70% of free cash flow to shareholders. Devon Energy has planned a capital expenditure budget of $3.65 billion for the upcoming year, which is $200 million lower than previous estimates. Over half of this budget is allocated to operations in the Delaware Basin, with a $1 billion commitment to activities in the Rockies. InvestingPro highlights Devon Energy’s impressive 33-year track record of maintaining dividend payments, with the stock recently showing strong momentum with a 9.79% return over the past week. For deeper insights into Devon Energy’s financial health and growth prospects, access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
The company’s operational strategy includes running 14 rigs in the Delaware Basin and bringing approximately 265 gross wells into service throughout 2025. In light of the updated production figures, capital expenditure, and cash return guidance provided by Devon Energy, Bernstein analysts have revised their model, resulting in the new price target of $48.00 for the company’s stock.
In other recent news, Devon Energy reported fourth-quarter 2024 earnings that surpassed analyst expectations, with adjusted earnings of $1.16 per share compared to the projected $0.98. The company’s revenue also exceeded forecasts, reaching $4.4 billion against the anticipated $4.17 billion. Devon’s oil production hit a record 398,000 barrels per day, contributing to a total production increase of 16% from the previous quarter. Following these results, Devon Energy’s board approved a 9% increase in the quarterly fixed dividend to $0.24 per share.
Additionally, Mizuho (NYSE:MFG) Securities raised its price target for Devon Energy to $49, maintaining an Outperform rating, citing the company’s effective capital plan and higher-than-expected production volumes. Devon Energy plans to allocate up to 70% of its free cash flow to shareholder returns, including dividends and share buybacks. The company also concluded its operating partnership with BPX in the Eagle Ford (NYSE:F) region and anticipates cost savings in drilling and completion operations.
Meanwhile, JPMorgan adjusted its price target for Devon Energy to $48, maintaining a Neutral rating, reflecting the company’s strategic focus on capital efficiency and shareholder returns. Devon Energy’s management transition with COO Clay Gaspar set to become CEO in March is also underway, with plans to continue the existing strategic direction.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.