Devon Energy’s Balanced Outlook: Progress in Optimization Amid Mixed Q4 Guidance and Pricing Pressures

TD Cowen analyst David Deckelbaum has maintained their neutral stance on DVN stock, giving a Hold rating on October 27.

David Deckelbaum has given his Hold rating due to a combination of factors that reflect both strengths and challenges for Devon Energy. The company is making progress with its optimization plan, which is expected to yield significant cost savings by the end of 2025. This plan has already contributed to a better-than-expected performance in the third quarter, with production and operating expenses surpassing forecasts. However, the guidance for the fourth quarter presents a mixed picture, with production levels slightly below estimates and capital expenditures above consensus expectations.
Additionally, while Devon Energy’s earnings showed some positive aspects, such as beating EBITDAX estimates due to lower unit costs, there are concerns about pricing pressures, particularly in natural gas. The company’s capital expenditures were higher than anticipated due to lease sales and infrastructure investments, which could impact future financial flexibility. Despite these challenges, Devon Energy continues to focus on shareholder returns, maintaining its dividend and share repurchase activities. Overall, these factors contribute to a balanced outlook, justifying the Hold rating.

Deckelbaum covers the Energy sector, focusing on stocks such as APA, Sable Offshore, and Coterra Energy. According to TipRanks, Deckelbaum has an average return of 3.6% and a 38.12% success rate on recommended stocks.

In another report released on October 27, Evercore ISI also maintained a Hold rating on the stock with a $37.00 price target.