Devon Energy (DVN), and stocks of other natural gas providers, are up sharply as winter weather descends across Europe.
Don't Miss Our New Year's Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
DVN stock is up 4% in early trading on January 2 amid reports that the United Kingdom (U.K.) is being hit with snow and ice, and Nordic countries are dealing with freezing temperatures. The result is that European natural gas inventories are falling at their fastest rate since 2021, leading to a spike in demand and increase in prices.
Natural gas prices are up more than 2% in North American trading on January 2. Prices have now risen more than 25% in the past week on forecasts of cold winter weather in both Europe and North America. Other natural gas stocks that are up 3% or higher on the day include Cheniere Energy (LNG) and Chevron (CVX).
A Strong Year for Natural Gas
A winter storm that moved across the U.K. in recent days is now passing over Norway and Sweden. Temperatures in Oslo, Norway’s capital city, are expected to fall as low as -15 degrees Celsius in coming days, while ski resorts in France and Italy are expecting more than a meter of snow in the next week.
The current cold snap across Europe also coincides with the end of the Ukraine-Russia pipeline transit deal, leaving that region of the continent without a reliable source of natural gas. The latest rise has resulted in natural gas prices finishing 2024 nearly 45% higher, their biggest annual gain since 2021.
The price of natural gas is currently at $3.711 U.S. per million British thermal units.
Is DVN Stock a Buy?
The stock of Devon Energy currently has a consensus rating of Moderate Buy among 18 Wall Street analysts. That rating is based on 10 Buy and eight Hold recommendations issued in the past three months. The average price target on DVN stock of $49.12 implies 45% upside from current levels.
