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Can Devon Energy (DVN) Keep Its Earnings Streak Alive in Q1?
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We expect Devon Energy Corporation (DVN - Free Report) to beat earnings estimates when it reports first-quarter 2017 financial results after the market closes on May 2. The independent energy company reported positive earnings surprise in the last four quarters, resulting in an average surprise of 62.63%.
Why a Likely Positive Surprise?
Our proven model shows that Devon Energy is likely to beat estimates because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates and Devon Energy has the right mix. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The company’s Earnings ESP stands at +10.53%. This is because the Most Accurate estimate is pegged at 42 cents, higher than the Zacks Consensus Estimate of 38 cents. This is a meaningful and leading indicator of a likely positive surprise.
Zacks Rank: Devon Energy currently carries a Zacks Rank #3. The combination of Devon Energy’s favorable Zacks Rank and positive ESP makes us reasonably confident of a positive surprise this season.
Conversely, we caution against stocks with Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Factors to Consider
Devon Energy expects to produce in the range of 535–555 thousand barrels of oil equivalent per day (MBoe/d) in the first quarter of 2017. During the first quarter the company increased its high-margin domestic oil production.
As a result of asset divesture in 2016, the company was able to retire a $2.5 billion debt. Redemption of debt will lower the company’s annual interest burden by $120 million and boost the margins in each quarter of 2017.
Devon Energy’s investment in midstream business yielded positive results in 2016. The positive contribution from this business is expected to continue in first quarter as well
Devon Energy will also benefit from its ongoing cost saving initiatives, which will further boost margins in the first quarter.
Stocks to Consider
Apart from Devon Energy, here are a few players in the Oil &Gas – Exploration & Production – U.S. industry that have the right combination of elements to post an earnings beat this quarter.
Chesapeake Energy Corporation (CHK - Free Report) is expected to report first-quarter 2017 earnings on May 4. It has an Earnings ESP of +5.00% and a Zacks Rank #3.
Eclipse Resources Corporation has an Earnings ESP of +33.33% and a Zacks Rank #3. It is expected to report first-quarter earnings on May 4.
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Can Devon Energy (DVN) Keep Its Earnings Streak Alive in Q1?
We expect Devon Energy Corporation (DVN - Free Report) to beat earnings estimates when it reports first-quarter 2017 financial results after the market closes on May 2. The independent energy company reported positive earnings surprise in the last four quarters, resulting in an average surprise of 62.63%.
Why a Likely Positive Surprise?
Our proven model shows that Devon Energy is likely to beat estimates because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates and Devon Energy has the right mix. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The company’s Earnings ESP stands at +10.53%. This is because the Most Accurate estimate is pegged at 42 cents, higher than the Zacks Consensus Estimate of 38 cents. This is a meaningful and leading indicator of a likely positive surprise.
Devon Energy Corporation Price and EPS Surprise
Devon Energy Corporation Price and EPS Surprise | Devon Energy Corporation Quote
Zacks Rank: Devon Energy currently carries a Zacks Rank #3. The combination of Devon Energy’s favorable Zacks Rank and positive ESP makes us reasonably confident of a positive surprise this season.
Conversely, we caution against stocks with Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Factors to Consider
Devon Energy expects to produce in the range of 535–555 thousand barrels of oil equivalent per day (MBoe/d) in the first quarter of 2017. During the first quarter the company increased its high-margin domestic oil production.
As a result of asset divesture in 2016, the company was able to retire a $2.5 billion debt. Redemption of debt will lower the company’s annual interest burden by $120 million and boost the margins in each quarter of 2017.
Devon Energy’s investment in midstream business yielded positive results in 2016. The positive contribution from this business is expected to continue in first quarter as well
Devon Energy will also benefit from its ongoing cost saving initiatives, which will further boost margins in the first quarter.
Stocks to Consider
Apart from Devon Energy, here are a few players in the Oil &Gas – Exploration & Production – U.S. industry that have the right combination of elements to post an earnings beat this quarter.
EQT Corporation (EQT - Free Report) has an Earnings ESP of +11.11% and a Zacks Rank #3. It is slated to report first-quarter earnings on Apr 27. You can see the complete list of today’s Zacks #1 Rank stocks here.
Chesapeake Energy Corporation (CHK - Free Report) is expected to report first-quarter 2017 earnings on May 4. It has an Earnings ESP of +5.00% and a Zacks Rank #3.
Eclipse Resources Corporation has an Earnings ESP of +33.33% and a Zacks Rank #3. It is expected to report first-quarter earnings on May 4.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>