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Devon Energy (DVN) Rises But Trails Market: What Investors Should Know

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The most recent trading session ended with Devon Energy (DVN - Free Report) standing at $48.61, reflecting a +0.37% shift from the previouse trading day's closing. This move lagged the S&P 500's daily gain of 0.89%. At the same time, the Dow added 1.03%, and the tech-heavy Nasdaq gained 1.25%.

The oil and gas exploration company's stock has climbed by 11.56% in the past month, exceeding the Oils-Energy sector's gain of 5.25% and the S&P 500's gain of 3.56%.

Investors will be eagerly watching for the performance of Devon Energy in its upcoming earnings disclosure. In that report, analysts expect Devon Energy to post earnings of $1.13 per share. This would mark a year-over-year decline of 22.6%. Alongside, our most recent consensus estimate is anticipating revenue of $3.59 billion, indicating a 6% downward movement from the same quarter last year.

DVN's full-year Zacks Consensus Estimates are calling for earnings of $4.84 per share and revenue of $14.83 billion. These results would represent year-over-year changes of -15.24% and -2.78%, respectively.

Investors should also take note of any recent adjustments to analyst estimates for Devon Energy. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 9.46% decrease. Devon Energy is holding a Zacks Rank of #4 (Sell) right now.

In terms of valuation, Devon Energy is currently trading at a Forward P/E ratio of 10. This indicates a discount in contrast to its industry's Forward P/E of 10.78.

One should further note that DVN currently holds a PEG ratio of 0.19. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Oil and Gas - Exploration and Production - United States industry was having an average PEG ratio of 0.71.

The Oil and Gas - Exploration and Production - United States industry is part of the Oils-Energy sector. This industry, currently bearing a Zacks Industry Rank of 210, finds itself in the bottom 17% echelons of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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