Devon Energy (DVN) AI Stock Analysis

• Market Cap: $26.83B
• Dividend Yield: 2.64%
• Average Volume (3M): 11.08M
• Price to Earnings (P/E): 10.4
• Beta (1Y): 0.55
• Revenue Growth: 11.14%
• EPS Growth: -21.32%
• Country: US
• Employees: 2,300
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.82
• Shares Outstanding: 620,000,000
• 10 Day Avg. Volume: 9,742,528
• 30 Day Avg. Volume: 11,084,785
• PEG Ratio: -1.11
• Price to Book (P/B): 1.48
• Price to Sales (P/S): 1.34
• P/FCF Ratio: 7.38
• Enterprise Value/Market Cap: 1.26
• Enterprise Value/Revenue: 2.03
• Enterprise Value/Gross Profit: 8.96
• Enterprise Value/Ebitda: 4.59
• 1Y Price Target: $47.71
• Price Target Upside: 11.94% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 18
• EPS Forecast (FY): 3.26
• Revenue Forecast (FY): $15.12B

• Rating: 77 Outperform
• Price Target: $50.00 ▲(17.32% Upside)
• Action: Reiterated Date: 02/19/26
• Date: Action: Reiterated 02/19/26

The score is driven primarily by solid financial performance (strong profitability/operating cash flow with improved leverage) and a constructive earnings outlook emphasizing sustained free cash flow and potential synergy-driven upside from the Coterra merger. Technicals are supportive with a clear uptrend, while valuation remains attractive on a low P/E and moderate yield, partially offset by cyclicality and free-cash-flow volatility.

Positive Factors

Cash Generation

Sustained multi‑billion-dollar free cash flow in 2025 demonstrates durable upstream cash generation capacity. That level of FCF supports ongoing debt reduction, dividend increases and sizable buybacks, enabling repeatable capital returns even through normal commodity cycles.

Balance Sheet Health

Material deleveraging versus earlier cycles and a net debt/EBITDA below 1.0x provide financial flexibility. Manageable leverage enhances resilience to downturns, preserves investment-grade access to capital, and allows priority on shareholder returns and strategic M&A when market windows appear.

Operational Efficiency

Above‑peer well productivity and superior capital efficiency indicate advantaged reservoir quality and execution. These structural efficiencies lower unit breakevens, increase margin sustainability across cycles, and support higher reserve replacement at lower F&D cost.

Negative Factors

FCF Volatility

Wide swings in free cash flow highlight sensitivity to commodity prices, timing of capex and working capital. This volatility complicates multi‑year planning, makes sustainable buyback/dividend pacing harder to predict, and raises the risk that returns erode in prolonged market weakness.

High Base Declines

Elevated base decline rates require persistent drilling to maintain production, pressuring long‑term capital intensity. Even with strong well productivity, ongoing reinvestment needs can limit free cash flow retention and amplify sensitivity to service costs and operational disruptions.

Merger Execution Risk

The Coterra combination is structurally transformative but carries integration, regulatory and governance execution risk. Realizing $1B synergies depends on portfolio rationalization and operational alignment; delays or weaker integration could dilute near‑term cash flow and strategic focus.

Devon Energy Business Overview & Revenue Model

Company Description

Devon Energy Corporation, an independent energy company, primarily engages in the exploration, development, and production of oil, natural gas, and natural gas liquids in the United States. It operates approximately 5,134 gross wells. Devon Energy Corporation was incorporated in 1971 and is headquartered in Oklahoma City, Oklahoma.

How the Company Makes Money

Devon Energy generates revenue primarily through the sale of crude oil, natural gas, and natural gas liquids (NGLs). The company sells its production to various customers, including major oil companies and local utilities, primarily through long-term contracts and spot market transactions. Key revenue streams include the pricing of oil and gas, which can fluctuate based on market conditions, regional demand, and geopolitical factors. Additionally, Devon's strategic investments in high-quality assets and its focus on cost management contribute to its profitability. The company also benefits from partnerships and joint ventures that help to enhance its operational capabilities and expand its resource base.

Devon Energy Financial Statement Overview

Summary

Solid profitability and operating cash generation with improved leverage versus 2020, but results remain commodity-cyclical and free cash flow has been volatile (including a negative year in 2024).

Income Statement

Profitability is solid and broadly resilient across the cycle: net profit margin remained healthy in recent years (about 15% in 2025 vs. ~25% in 2023 and ~30% in 2022), and EBITDA margin stayed strong (~41% in 2025). Revenue rebounded meaningfully in 2025 (strong growth vs. 2024), but results are clearly volatile—revenue fell sharply in 2023 and the company posted large losses in 2020—highlighting commodity sensitivity and earnings swing risk. 2025 also shows missing/zero gross profit and EBIT fields, which reduces confidence in the completeness of operating-profit detail for that period.

Balance Sheet

Leverage looks manageable for the sector: debt-to-equity improved from very elevated levels in 2020 (~1.58x) to a more moderate range in 2023–2025 (~0.53x–0.57x), supported by a larger equity base. Returns on equity are strong in the upcycle (roughly 17% in 2025; higher in 2022–2024), but they have shown meaningful variability (deeply negative in 2020), underscoring cyclicality. Total debt remains sizable (~$8.8B in 2025), so the balance sheet is improved but still exposed if industry conditions weaken.

Cash Flow

Operating cash flow is consistently strong in recent years (about $6.5–$8.5B from 2022–2025), indicating good cash-generating capability. However, free cash flow volatility is a key watchout: it turned negative in 2024 (about -$0.9B) before rebounding sharply positive in 2025 (~$3.1B). Cash conversion is mixed—free cash flow was a modest share of net income in 2025 (~46%) and negative in 2024—suggesting swings in capital spending and/or working capital can meaningfully impact shareholder cash returns.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	17.13B	15.57B	15.14B	19.83B	13.75B
Gross Profit	4.23B	4.27B	5.20B	8.97B	5.21B
EBITDA	7.42B	7.43B	7.57B	10.38B	5.42B
Net Income	2.64B	2.89B	3.75B	6.01B	2.78B
Balance Sheet
Total Assets	31.60B	30.49B	24.49B	23.72B	21.02B
Cash, Cash Equivalents and Short-Term Investments	1.43B	846.00M	875.00M	1.45B	2.10B
Total Debt	8.78B	9.20B	6.45B	6.70B	6.73B
Total Liabilities	16.07B	15.79B	12.27B	12.43B	11.63B
Stockholders Equity	15.53B	14.50B	12.06B	11.17B	9.26B
Cash Flow
Free Cash Flow	3.12B	-853.00M	2.60B	3.40B	2.89B
Operating Cash Flow	6.71B	6.60B	6.54B	8.53B	4.90B
Investing Cash Flow	-3.39B	-7.33B	-3.94B	-5.12B	-1.57B
Financing Cash Flow	-2.73B	706.00M	-3.18B	-4.21B	-3.29B

Devon Energy Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 42.62
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DVN, the sentiment is Neutral. The current price of 42.62 is below the 20-day moving average (MA) of 42.96, above the 50-day MA of 39.18, and above the 200-day MA of 34.93, indicating a neutral trend. The MACD of 1.37 indicates Positive momentum. The RSI at 54.46 is Neutral, neither overbought nor oversold. The STOCH value of 16.81 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DVN.

Devon Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FANG	80 Outperform	$49.43B	30.11	4.42%	2.70%	60.29%	-17.62%
DVN	77 Outperform	$26.83B	10.37	17.60%	2.64%	11.14%	-21.32%
COP	77 Outperform	$135.18B	17.41	12.32%	3.43%	8.41%	-16.12%
EQT	76 Outperform	$36.46B	17.64	9.20%	1.17%	64.84%	219.47%
CTRA	74 Outperform	$23.14B	14.07	11.86%	3.39%	26.13%	31.42%
OXY	72 Outperform	$51.24B	32.23	6.86%	2.39%	-2.48%	-65.26%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%

Devon Energy Corporate Events

Devon Energy Announces All-Stock Merger with Coterra

On February 1, 2026, Devon Energy signed a definitive all-stock agreement to acquire Coterra Energy through a merger in which Coterra shareholders will receive 0.70 Devon shares for each Coterra share, leaving Devon and Coterra investors owning roughly 54% and 46% of the combined group, respectively. Announced publicly on February 2, 2026, the deal, valued at about $58 billion based on Devon’s late-January share price, aims to create one of the world’s largest shale producers with more than 1.6 million barrels of oil equivalent per day of pro forma output and a dominant, long-duration position in the Delaware Basin. The companies project $1 billion in annual pre-tax synergies by 2027, driven by capital optimization, operating efficiencies and lower corporate costs, and expect the transaction to be accretive to key per-share metrics while reinforcing an investment-grade balance sheet. Governance of the combined company will be shared between a reconstituted 11-member board, with Devon’s Clay Gaspar serving as president and CEO and Coterra’s Tom Jorden as non-executive chair, while Coterra’s CFO Shannon Young becomes principal financial officer; the merger remains subject to shareholder votes, regulatory approvals and customary closing conditions, with no go‑shop provision and significant termination fees underscoring the strategic and binding nature of the combination.

The most recent analyst rating on (DVN) stock is a Buy with a $55.00 price target. To see the full list of analyst forecasts on Devon Energy stock, see the DVN Stock Forecast page.