Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 23 Jun, 25 | DVN | Buy | USD 34.29 | USD 35.8 | USD 37.0 | 65 days | Closed |
4.40%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
Devon Energy Corporation, an independent energy company, engages in the exploration, development, and production of oil, natural gas, and natural gas liquids in the United States. It operates in Delaware, Eagle Ford, Anadarko, Williston, and Powder River Basins. The company was founded in 1971 and is headquartered in Oklahoma City, Oklahoma.
Cost Reduction in Eagle Ford: Achieved per-well cost savings of USD 2.7 million, supported by improved drilling and completion practices and supply chain efficiencies
Free Cash Flow Generation: Devon generated USD 1.008 billion in free cash flow in Q1 2025, reflecting its operational efficiency and disciplined reinvestment strategy
Cash Usage: The company experienced a cash outflow of USD 591 million during Q1 2025 from capital expenditures (USD 942M), dividends and buybacks (USD 464M), and other adjustments, reducing its ending cash balance
Quarter-over-Quarter Net Earnings Decline: Net core earnings declined from USD 779 million in Q4 2024 to USD 756 million in Q1 2025, indicating a marginal reduction despite strong operations
Devon Energy's profitability and cash flow remain highly sensitive to oil and gas price volatility, regulatory developments, and potential execution risks tied to its extensive optimization plan and capital deployment strategy
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 34.29 | 30.5 | 35.8 | 37.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Robust Operational Performance: In the first quarter of 2025, Devon Energy delivered outstanding operational results, surpassing oil production guidance with an average output of 388,000 barrels per day. This was driven by strong well performance across its diversified portfolio, including the Delaware, Eagle Ford, Rockies, and Anadarko basins. The company also achieved a 7% improvement in drilling efficiency and a 12% increase in completion efficiency year-to-date compared to 2024, reflecting gains from technological innovation and optimized operations.
Prudent Capital Allocation and Cost Control: Devon maintained a disciplined capital spending approach, investing USD 964 million, which was approximately 5% below midpoint guidance. This contributed to a reduction in reinvestment rate to 50% of operating cash flow. Additionally, design enhancements and improved supply chain execution in the Eagle Ford basin resulted in per-well cost savings of USD 2.7 million. These efforts reinforce the company's focus on maximizing capital efficiency and minimizing operational expenditures.
Strengthened Financial Position: The company reported USD 1.0 billion in free cash flow for Q1 2025 and increased its cash position to USD 1.2 billion by the end of the quarter. Its net debt-to-EBITDAX ratio remained stable at 1.0x, in line with its target to maintain low leverage. Devon also holds a robust liquidity position of USD 4.2 billion, including undrawn credit facilities, and retains investment-grade credit ratings from both S&P and Moody’s.
Continued Shareholder Returns: During the quarter, Devon returned USD 464 million to shareholders through USD 163 million in dividend payments and USD 301 million in share repurchases. The company reaffirmed its commitment to returning cash to investors through sustainable fixed dividends and an active share buyback program, funded by its solid free cash flow generation and strong balance sheet.
Strategic Optimization and Outlook: Devon launched a multi-year business optimization initiative targeting USD 1 billion in annual pre-tax free cash flow improvements by the end of 2026. This plan focuses on production optimization, capital efficiency, commercial enhancements, and corporate cost reductions. The company also revised its 2025 outlook, aiming to increase oil production with a lower capital budget of USD 3.7–USD 3.9 billion and projecting up to USD 3.3 billion in free cash flow at USD 70 WTI oil prices.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on Devon Energy Corporation (NYSE: DVN) at the closing market price of USD 34.29, as on June 20, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Energy Industry: Oil & Gas E&P
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| DVN Devon Energy Corporation |
-0.785 2.12% | 36.16 | 7.03 | 7.04 | 1.72 | 1.75 | 2.13 | 4.41 |
| COP ConocoPhillips |
-2.18 2.30% | 92.78 | 12.82 | 11.12 | 2.24 | 2.90 | 2.47 | 5.63 |
| CNQ Canadian Natural Resources Ltd |
-0.16 0.50% | 31.70 | 15.51 | 14.24 | 2.37 | 2.92 | 2.26 | 5.34 |
| EOG EOG Resources Inc |
-2.005 1.91% | 102.73 | 9.09 | 8.98 | 3.01 | 2.57 | 2.97 | 5.16 |
| PEXNY PTT Exploration & Production |
- -% | 4.74 | 25.79 | 24.51 | 5.92 | 3.66 | 0.05 | 0.08 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is Jun 20,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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