Back to top

Analyst Blog

On Nov 22, we maintained our Neutral recommendation on the independent oil & gas operator, Devon Energy Corporation (DVN - Analyst Report). Devon Energy currently has a Zacks Rank #3 (Hold).

Why the Reiteration?

Devon Energy’s earnings in the third quarter exceeded the Zacks Consensus Estimate and year-ago results, primarily due to higher production and better realized prices of the product sold.

Devon Energy is presently more focused on oil and liquid generation, which are its highest margin products. The company decided to acquire GeoSouthern Energy to enhance its footprint in the Eagle Ford shale. The GeoSouthern Energy assets, located in a high reserve content region of the shale, will boost the reserve and production capability of the company.

The company has also decided to form a midstream MLP business along with Crosstex. The emphasis on the development of midstream assets appears to be a smart move, given the current oil and natural gas production boom in the U.S.

The prices of oil and gas are however tied to macro and other political factors, and can be pretty volatile. Any unfavorable movement in the market price and a decline in the realized prices will affect the revenue and earnings streams of the company.

In addition, Devon’s operations are subject to numerous U.S. and Canadian rules and regulations. Changes and modification to public policies can affect the operations of the company. The compliance with these provisions and adherence to any change in the policies would increase operating costs and constrain margins.

Other Stocks to Consider

Stocks in the oil and gas sector that are currently performing well include SM Energy Company (SM - Analyst Report), Matador Resources Company (MTDR - Snapshot Report) and Bonanza Creek Energy, Inc. (BCEI - Snapshot Report). All these companies carry a Zacks #1 Rank (Strong Buy). 

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UTD THERAPE… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%