Devon Energy Stock: Is DVN Underperforming the Energy Sector?

Devon Energy Corporation (DVN), headquartered in Oklahoma City, Oklahoma, with a market cap of $20.4 billion, is a leading independent energy company specializing in oil and natural gas exploration and production. Recognized for its innovative technologies and focus on operational excellence, Devon Energy is committed to delivering reliable energy solutions while driving sustainable practices in the energy sector.

Companies valued at over $10 billion are typically classified as “large-cap stocks,” a category Devon Energy exemplifies through its strong market presence and leadership in the energy sector. By leveraging advanced technologies and focusing on responsible resource development, Devon continues to meet the evolving needs of global energy markets and stakeholders.

Shares of Devon Energy are currently trading 44.6% below their 52-week high of $55.09, reached on Apr. 12. Over the past three months, the stock has fallen 25.5%, underperforming the Energy Select Sector SPDR Fund (XLE), which declined 6.3% over the same period.

However, over the past 52 weeks, DVN stock has declined 33.2% and is down 32.6% on a YTD basis, significantly underperforming the XLE, which has dropped 2.2% over the past year and slightly down on a YTD basis.

Devon Energy has been trading below its 200-day moving average since late July and its 50-day moving average since May, signaling a persistent bearish trend.

Shares of Devon Energy declined over 1% on Dec. 17, in line with broader energy sector weakness following a 1% drop in WTI crude oil prices.

Devon Energy has underperformed its peers due to various factors, including declining oil prices, heightened competition, and operational challenges. However, following the release of its mixed Q3 earnings on Nov. 5, the stock saw a modest increase, edging up by 1.7% in the subsequent trading session. The company reported a 4.9% year-over-year rise in total revenue, reaching $4.02 billion, though its Q3 profit declined by 10.8% to $812 million.

Moreover, Devon Energy has raised its Q4 production forecast to 811,000 to 830,000 Boe per day range, driven by its Williston Basin acquisition, with a capital outlook midpoint of $950 million to support growth initiatives.

Highlighting the contrast in performance, rival Marathon Oil Corporation (MRO) has outperformed DVN, with a 12.8% gain over the 52 weeks and 18.2% on a YTD basis.

Given Devon Energy’s recent performance, analysts remain cautiously optimistic about its prospects. The stock holds a consensus “Moderate Buy” rating from 25 covering analysts, with a mean price target of $50.96, indicating a potential upside of 67% from its current level.

On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. More news from Barchart

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