Devon Energy
DVN
$49.10
-0.41%
Devon Energy Corporation is a leading independent oil and gas exploration and production company, primarily operating in the Permian Basin, with additional acreage in the Anadarko, Eagle Ford, and Bakken basins. Following its merger with Coterra Energy in May 2026, Devon has expanded its footprint into the gas-rich Appalachian Basin, solidifying its position as one of the largest U.S. shale producers. The company is currently in the spotlight as it integrates the Coterra merger, which is expected to deliver significant cost synergies and enhance shareholder returns. Additionally, elevated oil prices driven by geopolitical tensions and supply concerns are supporting strong cash flow generation, making Devon a key player in the energy sector's current rally.…
DVN
Devon Energy
$49.10
Related headlines
DVN 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Devon Energy's 12-month outlook, with a consensus price target around $59.38 and implied upside of +20.9% versus the current price.
Average Target
$59.38
0 analysts
Implied Upside
+20.9%
vs. current price
Analyst Count
—
covering this stock
Price Range
$44 - $68
Analyst target range
Devon Energy is covered by 26 analysts, with a consensus recommendation of 'Strong Buy' (mean rating of 1.30 on a 1-5 scale). The average price target is $59.73, implying a 30.3% upside from the current price of $45.85. The distribution is heavily skewed toward bullish ratings, with no 'Sell' ratings, indicating strong conviction among analysts. The target range spans from $44.00 (low) to $68.00 (high), with the high target suggesting a potential 48.3% upside, likely assuming successful merger integration and sustained high oil prices. The low target of $44.00 is slightly below the current price, reflecting downside risks from a potential oil price decline or operational setbacks. Recent institutional actions have been predominantly positive, with firms like UBS, Truist, and JP Morgan reaffirming or upgrading their ratings, signaling continued confidence in the stock's prospects.
Bulls vs Bears: DVN Investment Factors
Devon Energy presents a compelling value opportunity with a 42% discount to industry P/E, a robust 11.5% free cash flow yield, and strong analyst conviction (Strong Buy, 30% upside). However, the recent revenue decline, weak gross margins, and integration risks from the Coterra merger temper enthusiasm. The bull case currently has stronger evidence, supported by valuation and cash flow, but the key tension is whether merger synergies and oil price strength can offset operational headwinds. If oil prices remain elevated and integration delivers, the stock could re-rate significantly; if not, the low P/E may be a value trap.
Bullish
- Strong Buy consensus with 30% upside: 26 analysts rate DVN a Strong Buy (mean 1.30), with an average target of $59.73, implying 30.3% upside from $45.85. No Sell ratings, and recent actions from UBS, Truist, and JP Morgan are positive.
- Deep value: 42% discount to industry P/E: Trailing P/E of 8.70x vs. industry average of 15x, a 42% discount. Forward P/E of 8.51x and EV/EBITDA of 4.02x further underscore undervaluation relative to peers.
- High free cash flow yield of 11.5%: TTM free cash flow of $2.636B against a market cap of $23.0B yields 11.5%, providing ample capacity for dividends, buybacks, and debt reduction. This supports shareholder returns.
- Merger synergies and Permian strength: The Coterra merger completed in May 2026 is expected to deliver significant cost synergies, while the recent federal lease acquisition in the Delaware Basin extends premium inventory. Production is 73% oil/NGLs, positioning for high oil prices.
Bearish
- Revenue declining 14.5% YoY: Q1 2026 revenue of $3.807B was down 14.49% from $4.452B a year ago, reflecting lower commodity prices and production disruptions from merger integration. This trend may persist.
- Merger integration risks: The Coterra merger, completed in May 2026, brings operational complexity. Q1 2026 net income of $120M was a sharp drop from $494M in Q1 2025, indicating integration costs and lower margins.
- Weak gross margin of 12.1%: Q1 2026 gross margin fell to 12.1% from 26.8% a year ago, pressured by higher costs and lower prices. This could signal reduced profitability if commodity prices weaken.
- High leverage post-merger: Debt-to-equity of 0.57 and current ratio of 0.98 indicate elevated leverage and tight liquidity. Interest expense of $123M in Q1 2026 adds fixed costs.
DVN Technical Analysis
Devon Energy's stock is in a clear uptrend over the past year, with a 1-year price change of +35.45%, significantly outperforming the S&P 500's +20.37% return. The current price of $45.85 sits at 87% of its 52-week range (low of $31.47, high of $52.71), indicating the stock is trading near the upper end of its range, reflecting strong momentum and investor confidence. This positioning suggests the stock is in a bullish phase, though it may be approaching overbought conditions given its proximity to the 52-week high.
Beta
0.42
0.42x market volatility
Max Drawdown
-22.7%
Largest decline past year
52-Week Range
$31-$53
Price range past year
Annual Return
+44.9%
Cumulative gain past year
| Period | DVN Return | S&P 500 |
|---|---|---|
| 1m | +9.4% | +2.5% |
| 3m | +4.0% | +2.7% |
| 6m | +10.6% | +11.1% |
| 1y | +44.9% | +20.5% |
| ytd | +29.7% | +12.3% |
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DVN Fundamental Analysis
Devon's revenue has been declining, with Q1 2026 revenue of $3.807 billion, down 14.49% year-over-year from $4.452 billion in Q1 2025. This decline is primarily due to lower commodity prices and reduced production volumes, as the company integrates the Coterra merger. However, the company's EBITDA remains robust at $1.188 billion in Q1 2026, with an EBITDA margin of 31.2%, indicating strong operational efficiency despite lower revenue. The multi-quarter trend shows revenue peaked in Q1 2025 and has been declining since, reflecting the challenging pricing environment.
Quarterly Revenue
$3.8B
2026-03
Revenue YoY Growth
-14.5%
YoY Comparison
Gross Margin
12.1%
Latest Quarter
Free Cash Flow
$2.6B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is DVN Overvalued?
Given Devon's positive net income of $120 million in Q1 2026, the trailing P/E ratio of 8.70x is the most appropriate valuation metric. The forward P/E of 8.51x is slightly lower, implying that the market expects earnings to remain stable or improve slightly, which is reasonable given the company's cost synergies from the Coterra merger. Compared to the industry average P/E of 15x, Devon trades at a 42% discount, which is notable given its strong free cash flow yield of 11.5% and a dividend yield of 2.69%. This discount may reflect concerns about commodity price volatility and the integration risks associated with the merger.
PE
8.7x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 5x~13x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
4.0x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Devon's debt-to-equity of 0.57 and current ratio of 0.98 indicate moderate leverage and tight liquidity, which could strain cash flows if oil prices fall. Interest expense of $123M in Q1 2026 adds fixed costs, and the company's revenue declined 14.5% YoY, reflecting lower commodity prices and integration disruptions. Gross margin compressed to 12.1% from 26.8% a year ago, signaling cost pressures. The company's reliance on continued cost synergies from the Coterra merger is a key operational risk; if synergies fail to materialize, profitability could suffer.