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Can Devon Energy (DVN) Run Higher on Rising Earnings Estimates?
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Devon Energy (DVN - Free Report) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company.
Analysts' growing optimism on the earnings prospects of this oil and gas exploration company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
For Devon Energy, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year.
The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:
12 Month EPS
Current-Quarter Estimate Revisions
For the current quarter, the company is expected to earn $1.65 per share, which is a change of +266.67% from the year-ago reported number.
The Zacks Consensus Estimate for Devon Energy has increased 26.89% over the last 30 days, as three estimates have gone higher while two have gone lower.
Current-Year Estimate Revisions
For the full year, the earnings estimate of $7.56 per share represents a change of +114.16% from the year-ago number.
The revisions trend for the current year also appears quite promising for Devon Energy, with five estimates moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 18.11%.
Favorable Zacks Rank
The promising estimate revisions have helped Devon Energy earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
Bottom Line
While strong estimate revisions for Devon Energy have attracted decent investments and pushed the stock 6.4% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.
View the Zacks #1 Rank List
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Can Devon Energy (DVN) Run Higher on Rising Earnings Estimates?
Devon Energy (DVN - Free Report) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company.
Analysts' growing optimism on the earnings prospects of this oil and gas exploration company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
For Devon Energy, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year.
The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:
12 Month EPS
Current-Quarter Estimate Revisions
For the current quarter, the company is expected to earn $1.65 per share, which is a change of +266.67% from the year-ago reported number.
The Zacks Consensus Estimate for Devon Energy has increased 26.89% over the last 30 days, as three estimates have gone higher while two have gone lower.
Current-Year Estimate Revisions
For the full year, the earnings estimate of $7.56 per share represents a change of +114.16% from the year-ago number.
The revisions trend for the current year also appears quite promising for Devon Energy, with five estimates moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 18.11%.
Favorable Zacks Rank
The promising estimate revisions have helped Devon Energy earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
Bottom Line
While strong estimate revisions for Devon Energy have attracted decent investments and pushed the stock 6.4% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.