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Investing.com - UBS has reiterated its Neutral rating and $40.00 price target on Devon Energy (NYSE:DVN) ahead of the company’s third-quarter 2025 earnings report, scheduled for November 5. According to InvestingPro analysis, the stock appears undervalued, with 5 analysts recently revising their earnings expectations upward.
The investment firm noted that Devon Energy has demonstrated strong operational performance in the first half of the year, posting higher oil production and lower capital expenditures in both quarters. The company’s financial health score of GOOD on InvestingPro supports this view, with a P/E ratio of 7.39x and robust revenue growth of 7.79% over the last twelve months.
UBS expects this operational momentum to continue into the third quarter of 2025, with Devon showing early success on its $1 billion cost reduction program.
The firm highlighted that continued execution of this cost program could present downside risk to Wall Street’s capital expenditure estimates for 2026 and 2027.
UBS also pointed to Devon’s continued focus on debt reduction, which could support increased shareholder returns if the stock price falls due to weakening oil prices.
In other recent news, Devon Energy Corporation reported its financial results for the second quarter of 2025, showing mixed performance. The company posted earnings per share of $0.84, which fell short of the $0.88 forecast, marking a 4.55% negative surprise. However, Devon Energy’s revenue exceeded expectations by 5.94%, reaching $4.28 billion. In terms of analyst activity, Raymond James raised its price target for Devon Energy to $46 from $45, maintaining an Outperform rating. This adjustment followed Devon Energy’s beating of production and capital expenditure forecasts by approximately 2% and 7%, respectively. Wells Fargo also increased its price target to $43 from $42, keeping an Overweight rating, as it updated its models based on revised production volumes and cost-deflation assumptions. Additionally, Devon Energy announced the appointment of Brent J. Smolik to its board of directors, where he will serve on several committees.
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