Devon Energy (DVN) AI Stock Analysis

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Devon Energy

(NYSE:DVN)

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Outperform 79 (OpenAI - 4o)

Rating:79Outperform

Price Target:

$43.00

▲(7.96% Upside)

Devon Energy's strong technical indicators and positive earnings call sentiment are the most significant factors driving the stock score. The company's robust operational performance and strategic initiatives are offset by challenges in cash flow generation and macroeconomic headwinds. The valuation remains attractive, suggesting potential upside.

Positive Factors

Operational Efficiency

Devon's reduction in operating costs enhances its operational efficiency, leading to better margins and a stronger competitive position in the market.

Debt Reduction

Reducing debt strengthens Devon's balance sheet, improving financial stability and flexibility for future investments and growth opportunities.

Free Cash Flow Generation

Strong free cash flow generation allows Devon to return capital to shareholders and invest in growth, supporting long-term financial health and shareholder value.

Negative Factors

Declining Profit Margins

Decreasing profit margins may indicate rising costs or pricing pressures, which could impact Devon's profitability and competitive edge over time.

Negative Free Cash Flow Growth

Negative free cash flow growth suggests potential liquidity issues, which could limit Devon's ability to fund operations and future projects without external financing.

Challenging Macro Environment

Macroeconomic challenges and a well-supplied market may pressure Devon's pricing power and demand, affecting revenue and growth prospects.

Devon Energy (DVN) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$24.75B

Dividend Yield2.64%

Average Volume (3M)8.05M

Price to Earnings (P/E)9.3

Beta (1Y)0.56

Revenue Growth11.14%

EPS Growth-21.32%

CountryUS

Employees2,300

SectorEnergy

Sector Strength52

IndustryOil & Gas Exploration & Production

Share Statistics

EPS (TTM)1.04

Shares Outstanding627,300,000

10 Day Avg. Volume9,785,251

30 Day Avg. Volume8,052,586

Financial Highlights & Ratios

PEG Ratio-0.32

Price to Book (P/B)1.41

Price to Sales (P/S)1.31

P/FCF Ratio-23.90

Enterprise Value/Market Cap1.32

Enterprise Value/Revenue1.93

Enterprise Value/Gross Profit8.34

Enterprise Value/Ebitda4.20

Forecast

1Y Price Target

$43.68

Price Target Upside9.67% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering20

EPS Forecast (FY)N/A

Revenue Forecast (FY)N/A

Devon Energy Business Overview & Revenue Model

Company DescriptionDevon 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 MoneyDevon 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 Key Performance Indicators (KPIs)

Any

Total Oil Production

Total Oil Production
Measures the total volume of oil extracted, reflecting Devon Energy's operational scale and its ability to capitalize on market demand.

Chart InsightsDevon Energy's total oil production has seen a significant upward trend since mid-2024, peaking at the end of the year. This surge likely reflects strategic operational enhancements or new project completions. Despite a slight dip in early 2025, production remains robust, suggesting sustained operational efficiency. The absence of earnings call commentary leaves the reasons for this growth speculative, but the trend indicates strong production capabilities that could bolster future revenue and investor confidence.

Data provided by:

The Fly

Devon Energy Earnings Call Summary

Earnings Call Date:Nov 05, 2025

(Q3-2025)

% Change Since: |

Next Earnings Date:Feb 17, 2026

Earnings Call Sentiment Positive

Devon Energy delivered a strong third quarter, exceeding key metrics and advancing its business optimization plan significantly. The company demonstrated robust free cash flow generation, strong financial positioning, and effective portfolio optimization. Despite these achievements, the company acknowledged the challenging macro environment and market underappreciation of its business optimization efforts.

Q3-2025 Updates

Positive Updates

Exceeding Guidance Across Key Metrics

Devon Energy exceeded the midpoint of guidance on every key metric, including production, operating costs, and capital. Production optimization led to oil production exceeding the midpoint of guidance by 3,000 barrels per day, and operating costs reduced by 5% compared to the start of the year.

Significant Free Cash Flow Generation

Devon reported robust free cash flow of $820 million in the third quarter, allowing the company to return over $400 million to shareholders and retire $485 million of debt.

Advancement in Business Optimization Plan

The company is on track to generate an incremental $1 billion of annual pretax free cash flow, having already achieved more than 60% of the target.

Strong Capital Efficiency and Production Optimization

Capital investment was 10% below the first half run rate, and the production optimization initiatives led to a sustainable increase in free cash flow of $150 million.

Portfolio Optimization Actions

Devon took several portfolio optimization actions, delivering an uplift of over $1 billion to enterprise NAV. These include dissolving a joint venture in the Eagle Ford and executing strategic gas marketing agreements.

Strong Financial Position and Debt Reduction

The company ended the quarter with $4.3 billion in total liquidity and a net debt-to-EBITDA ratio of 0.9x. Devon also completed the retirement of $485 million in debt ahead of schedule.

Preliminary 2026 Outlook

Devon anticipates maintaining production around 845,000 BOE per day with capital investment of $3.5 billion to $3.7 billion, a reduction of $500 million compared to previous maintenance capital levels.

Negative Updates

Challenging Macro Environment

Despite achievements, the company faces persistent macro headwinds and an appearance of a well-supplied oil market, impacting the decision not to add incremental barrels to the market at this time.

Market Underappreciation of Business Optimization

The market has not immediately priced the aspirational $1 billion of incremental free cash flow in Devon's share price, indicating potential undervaluation.

Company Guidance

During Devon Energy's third-quarter 2025 earnings call, the company highlighted its strong performance by exceeding the midpoint of guidance on key metrics such as production, operating costs, and capital. The company generated $820 million in free cash flow, with oil production surpassing the midpoint of guidance by 3,000 barrels per day. Operating costs were reduced by 5% since the start of the year, and capital investment was 10% below the first half run rate. Devon returned over $400 million to shareholders and retired $485 million in debt. The company is on track to achieve an incremental $1 billion of annual pretax free cash flow by the end of 2025, having already captured more than 60% of this target. This optimization effort is enhancing margins and capital efficiency, positioning Devon well for continued strong performance into 2026.

Devon Energy Financial Statement Overview

Summary

Devon Energy demonstrates strong revenue growth and operational efficiency, with solid margins and a balanced capital structure. However, declining profitability margins and negative free cash flow growth present challenges that need to be addressed to sustain long-term financial health.

Income Statement

Positive

Devon Energy has shown strong revenue growth in the TTM period with a 72.8% increase, indicating robust performance in the oil and gas sector. The company maintains healthy margins, with a gross profit margin of 25.77% and a net profit margin of 16.98%. However, these margins have decreased compared to previous years, suggesting some pressure on profitability. The EBIT and EBITDA margins remain strong at 25.19% and 46.62%, respectively, reflecting efficient operations.

Balance Sheet

Positive

The balance sheet shows a moderate debt-to-equity ratio of 0.60, indicating a balanced approach to leverage. Return on equity is solid at 19.49%, showcasing effective use of shareholder funds. The equity ratio stands at 49.16%, suggesting a stable capital structure. However, the decrease in stockholders' equity over the years could pose a risk if not addressed.

Cash Flow

Positive

Devon Energy's cash flow statement reveals challenges in free cash flow generation, with a significant negative growth rate of -236.03% in the TTM period. The operating cash flow to net income ratio is healthy at 1.49, indicating strong cash generation relative to earnings. However, the negative free cash flow to net income ratio of -0.23 highlights potential liquidity concerns.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	16.88B	15.57B	15.14B	19.83B	13.75B	4.35B
Gross Profit	3.92B	4.27B	5.20B	8.97B	5.21B	-252.00M
EBITDA	7.76B	7.43B	7.57B	10.38B	5.42B	-1.36B
Net Income	2.72B	2.89B	3.75B	6.01B	2.78B	-2.68B
Balance Sheet
Total Assets	31.22B	30.49B	24.49B	23.72B	21.02B	9.91B
Cash, Cash Equivalents and Short-Term Investments	1.28B	846.00M	875.00M	1.45B	2.10B	2.05B
Total Debt	8.55B	9.20B	6.45B	6.70B	6.73B	4.54B
Total Liabilities	15.87B	15.79B	12.27B	12.43B	11.63B	6.89B
Stockholders Equity	15.35B	14.50B	12.06B	11.17B	9.26B	2.88B
Cash Flow
Free Cash Flow	3.03B	-853.00M	2.60B	3.40B	2.89B	193.00M
Operating Cash Flow	6.84B	6.60B	6.54B	8.53B	4.90B	1.35B
Investing Cash Flow	-3.47B	-7.33B	-3.94B	-5.12B	-1.57B	-646.00M
Financing Cash Flow	-2.77B	706.00M	-3.18B	-4.21B	-3.29B	-306.00M

Devon Energy Technical Analysis

Technical Analysis Sentiment

Positive

Last Price39.83

Price Trends

50DMA

36.64

Positive

100DMA

35.14

Positive

200DMA

33.67

Positive

Market Momentum

MACD

0.77

Negative

RSI

65.60

Neutral

STOCH

90.28

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DVN, the sentiment is Positive. The current price of 39.83 is above the 20-day moving average (MA) of 37.08, above the 50-day MA of 36.64, and above the 200-day MA of 33.67, indicating a bullish trend. The MACD of 0.77 indicates Negative momentum. The RSI at 65.60 is Neutral, neither overbought nor oversold. The STOCH value of 90.28 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DVN.

Devon Energy Peers Comparison

Overall Rating

UnderperformOutperform

Sector (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FANG	81 Outperform	$45.59B	11.06	10.92%	2.70%	60.29%	-17.62%
DVN	79 Outperform	$24.75B	9.28	18.35%	2.64%	11.14%	-21.32%
COP	78 Outperform	$123.41B	14.13	15.37%	3.43%	8.41%	-16.12%
EQT	76 Outperform	$33.96B	18.56	8.19%	1.17%	64.84%	219.47%
CTRA	73 Outperform	$20.95B	12.70	11.86%	3.39%	26.13%	31.42%
OXY	66 Neutral	$43.89B	32.42	5.82%	2.39%	-2.48%	-65.26%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%

* Energy Sector Average

Performance Comparison

DVN

Devon Energy

39.83

5.73

16.81%

CTRA

Coterra Energy

27.79

0.36

1.33%

COP

Conocophillips

101.39

2.41

2.43%

EQT

55.96

4.92

9.64%

OXY

Occidental Petroleum

44.83

-3.03

-6.33%

FANG

Diamondback

160.27

-5.44

-3.28%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Dec 02, 2025