Analyst Lloyd Byrne from Jefferies maintained a Hold rating on Devon Energy (DVN – Research Report) and keeping the price target at $43.00.
Lloyd Byrne’s rating is based on Devon Energy’s focus on internal opportunities and asset durability, which are key factors in the company’s strategy. The management team, including CEO Clay Gaspar, is dedicated to enhancing return on capital by lowering costs and leveraging technology, such as optimizing artificial lift systems. Despite these efforts, Devon Energy faces a significant core production decline of approximately 30%, requiring substantial capital to maintain production levels.
Additionally, while Devon Energy is making strides in reducing operating costs, such as through improvements in drilling efficiency and midstream operations, the company remains open to opportunistic mergers and acquisitions. The management emphasizes the durability of its existing inventory, particularly in the Delaware Basin, and is considering potential expansion opportunities. Byrne’s Hold rating reflects a cautious outlook, balancing the company’s cost improvement initiatives and strategic focus with the challenges of maintaining production and exploring M&A opportunities.
Byrne covers the Energy sector, focusing on stocks such as Baker Hughes Company, Civitas Resources, and EQT. According to TipRanks, Byrne has an average return of 20.4% and a 55.65% success rate on recommended stocks.
In another report released on March 28, RBC Capital also maintained a Hold rating on the stock with a $49.00 price target.