Devon Energy Has Strong Tailwinds, Analyst Says

Devon Energy Corporation DVN shares are trading higher on Wednesday after the company reported strong fourth-quarter results on Tuesday after the bell.

Also, the stock may have escalated probably due to a drone attack on a Russian pipeline, which could reduce supply.

Also, the company reported an EPS of $1.16, beating analyst estimates of $1.00, and oil production of 398,000 barrels per day, which was about 3% ahead of the company’s previous guidance.

Devon expects oil production to average 380,000 to 386,000 barrels per day in the first quarter and full-year 2025 production of 805,000 barrels per day-825,000 barrels per day, up 2% versus the company’s previous outlook.

Piper Sandler analyst Mark A. Lear writes that the company’s FY25 guidance sets a strong foundation, with oil and total volume projections slightly exceeding consensus on a 4% reduction in capex. The analyst has an Overweight rating with a price forecast of $54.

Given its history of setting achievable targets, the analyst expects a positive market reaction to the fourth-quarter beat and the improved efficiency in FY25 guidance, especially following the stock’s de-rating since mid-2024.

With a Sector Perform rating and $50 price forecast, RBC Capital Markets analyst Scott Hanold says that Devon’s 2025 outlook exceeded expectations, reflecting steady operations and strong efficiency across its asset base.

The analyst adds that all Bakken capital is directed toward high-return Grayson Mills acreage, while the benefits of Eagleford assets are expected to drive capital efficiency and production growth.

Investors can gain exposure to the stock via Invesco Energy Exploration & Production ETF PXE and Texas Capital Funds Trust Texas Capital Texas Oil Index ETF OILT.

Price Action: DVN shares are up 8.2% at $37.75 at the last check Wednesday.

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