Research
Research Alert: CFRA Maintains Sell Opinion On Shares Of Devon Energy Corporation
CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:Our 12-month target price of $42, raised $2, reflects relative valuation and our DCF models. On a relative basis, we apply a 4.5x multiple of enterprise value to projected 2027 EBITDA, in line with DVN's historical forward average, yielding a value of $42 per share. Our DCF model, using medium-term FCF growth of 4% per year, terminal growth of 2%, discounted ar a WACC of 5.6%, yields intrinsic value of $43 per share. We lift our '26 EPS estimate by $1.88 to $5.17, and similarly '27's by $0.48 to $4.70. The deal to acquire Coterra Energy is now closed, helping diversify DVN's asset base, and while its production profile remains liquids-led, natural gas is also a major portion of overall production. We remain somewhat concerned about pricing for gas in the Permian, given excess congestion, but that situation should alleviate over time as more pipe is added, in our view. DVN's new quarterly dividend of $0.32/share implies a yield of 2.8%, and buyback authorization of $8B is substantial.
$DVN