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Devon Energy (DVN) Gains But Lags Market: What You Should Know

Zacks Equity Research
United Rentals (URI) delivered earnings and revenue surprises of 5.80% and 1.11%, respectively, for the quarter ended June 2019. Do the numbers hold clues to what lies ahead for the stock?

Devon Energy (DVN) closed the most recent trading day at $25.69, moving +0.23% from the previous trading session. The stock lagged the S&P 500's daily gain of 1.05%. At the same time, the Dow added 1.02%, and the tech-heavy Nasdaq gained 1.66%.

Coming into today, shares of the oil and gas exploration company had lost 17.98% in the past month. In that same time, the Oils-Energy sector lost 3.69%, while the S&P 500 lost 2.76%.

DVN will be looking to display strength as it nears its next earnings release. On that day, DVN is projected to report earnings of $0.51 per share, which would represent year-over-year growth of 50%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.39 billion, up 6.26% from the year-ago period.

DVN's full-year Zacks Consensus Estimates are calling for earnings of $1.91 per share and revenue of $8.02 billion. These results would represent year-over-year changes of +48.06% and -35.08%, respectively.

Investors might also notice recent changes to analyst estimates for DVN. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 past month, the Zacks Consensus EPS estimate has moved 10.54% lower. DVN currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, DVN is holding a Forward P/E ratio of 13.41. Its industry sports an average Forward P/E of 10.99, so we one might conclude that DVN is trading at a premium comparatively.

Meanwhile, DVN's PEG ratio is currently 0.81. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Oil and Gas - Exploration and Production - United States stocks are, on average, holding a PEG ratio of 0.71 based on yesterday's closing prices.

The Oil and Gas - Exploration and Production - United States industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 51, putting it in the top 20% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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