Things are looking up in the energy sector as shares of many shale exploration and production companies posted strong showings in the last week of June. As a matter of fact, energy-related stocks have all experienced a hard sell-off, mostly on the heels of consistently aggressive Federal Reserve rate hikes that have prompted recession fears.
Devon Energy Corp. (NYSE: DVN), specifically, peaked on the NASDAQ at $57.79 after a rally bumped their value by nearly 8 percent during an all-around poor trading session across the market. That is good news at a time when the Standard & Poor's 500 slipped about a half a percent and the Dow Jones Industrial Average also fell about a quarter of a percent.
Fortunately, Devon Energy's uptick brought an abrupt—and much-needed—end to a three-day losing streak. This climb, however, is only the beginning as Devon Energy closed almost 75 percent lower than its 52-week high of $79.40.
Doing Better Than the Rest of the Market
The good news right now is that Devon Energy Corp outperformed many of its competitors in the latest quarter. Indeed, the modest 8 percent climb we have seen in recent days certainly beat lesser movement from BHP Group Ltd ADR (BHP), ConocoPhillips (COP), and EOG Resources Inc (EOG). These stocks saw minimal gains of 2.4 percent, 2.2 percent, and 2.8 percent, respectively. And Devon Energy Corp did this on a trading volume of 17.6 million, which also beat the 50-day average volume of 12.7 million.
This is actually a big improvement from earlier in June, when Devon Energy stock was down nearly 30 percent on the month.
An Encouraging Forecast History
It seems the analyst consensus forecast for Devon Energy stock during Q2 of 2021 put Earnings Per Share in the range of 0.35 and 0.62 with an inarguable consensus estimate of 0.52. Fortunately, the actual EPS hit the top of the range, at 0.6
More importantly, this easily exceeded what analysts had expected by a margin of more than 15.15 percent. On top of that, this trend continues through both third and fourth quarter of 2021. At that time, EPS beat analyst expectations again; this time by more than 16.3 percent and an astonishing 64.79 percent, respectively.
Finally, the momentum also carried EPS value into the new year, with Q1 2022 beating analysts Earnings Per Share estimates, though this time by a less substantial—but still notable—7.6 percent. All of this combined has contributed to an overall average quarterly growth of nearly 18.4 percent.
A Mostly Positive Outlook
Accordingly, then, Wall Street is certainly focused on Devon Energy's next earnings report, which is scheduled for an August 1, 2022 release. Analysts expect, on that day, Devon Energy will report earnings of $2.29 per share. If they do, it will represent an impressive year-over-year growth of 281.67 percent. In the same vein, some analysts consensus conclude that revenue will also be up, albeit at a lower margin of 93.1 percent, to $4.67 billion.
That said, Devon Energy stock value itself waivers from day to day in the short term. While the value is definitely up on the year and the year-to-date, performance continues to slip. Over the past month, the stock is down more than 20.6 percent. Both the 5-day and 3-month performance metric are down about 1.78 percent, on average.
Analysts Give DVN a Buy Rating, Mostly
Based on the response of at least 18 Wall Street analysts offering 12-month price targets over the most recent quarter, the average price target for DVN stock is $82.56. Of course, this is roughly the median target between a high of $103 and a low of $62. This new price target represents an increase of more than 42.8 percent from the previous price target of $57.79.
With a conservative price target like this, the majority of these analysts—at least two-thirds—would rate the stock a moderate buy (or better). At the same time, some analysts might argue that the stock is overweight but not quite ready for a buy rating; at least, not at this moment.
Devon Energy Corporation is an independent energy company that primarily engages in hydrocarbon exploration in the United States market. They are also involved in the both the development and production of oil and natural gas as well as natural gas liquids. Incorporated in 1971, their corporate headquarters is located in Delaware and its corporate operative headquarters are located in the 50-story Devon Energy Center in Oklahoma City, OK.
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