Will Soaring Crude Oil Prices Help Fuel Devon Stock?

Devon Energy shares, which nearly tripled last year, is expected to remain well supported, thanks to soaring energy prices and a recovery in demand, but it is yet to reach the highs recorded in 2008.

Last month, the Oklahoma City Oklahoma-based company reported quarterly adjusted earnings of $1.39​​ per share for the last quarter of 2021, beating the Wall Street consensus estimates of $1.24 per share.

The company said its revenue jumped over 233% to $4.27 billion from a year earlier. That too topped market expectations of $3.76 billion.

CNBC’s Jim Cramer said Friday, March 4, that investors looking for a stock to protect against global uncertainty should consider Devon Energy.

The international benchmark Brent crude oil briefly surged past $139 a barrel, its highest level since 2008, after the United States said it is willing to ban Russian oil imports, scaring investors who fear inflation and slow economic growth, Reuters reported.

At the time of writing, Devon Energy stock traded 3.12% higher at $61.80 on Tuesday. The stock rose over 35% so far this year after surging more than 190% in 2021.

Analyst Comments

“Peer-leading cash returns. Since the merger with WPX, Devon Energy (DVN) has outperformed peers as the well-structured deal added meaningful scale, asset diversification and accelerated cash returns. In-line valuation. Devon Energy (DVN) is trading at 4.5x 2022 EV/EBITDAX (vs. oil-weighted median of 4.3x) and offers a 15% FCF yield (vs. an oil-weighted median of 17%),” noted Devin McDermott, Equity Analyst And Commodities Strategist, equity analyst at Morgan Stanley.

“Balanced risk-reward. DVN remains well-positioned given its diversified oil-weighted asset base, financial strength, and differentiated shareholder return framework.”

Devon Energy Stock Price Forecast

Eighteen analysts who offered stock ratings for Devon Energy in the last three months forecast the average price in 12 months of $59.47 with a high forecast of $70.00 and a low forecast of $51.00.

The average price target represents a -3.11% change from the last price of $61.38. Of those 18 analysts, 13 rated “Buy”, five rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $54 with a high of $65 under a bull scenario and $32 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the independent energy company’s stock.

Several analysts have also updated their stock outlook. Scotiabank raised the target price to $65 from $62. BMO lifted the price target to $70 from $60. Piper Sandler upped the price objective to $67 from $62. Raymond James upped the target price to $70 from $65.

Technical analysis suggests it is good to buy as 100-day Moving Average and 100-200-day MACD Oscillator shows a strong buying opportunity.

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