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Devon Energy (DVN) Gains As Market Dips: What You Should Know

Zacks Equity Research

Devon Energy (DVN) closed at $6.18 in the latest trading session, marking a +1.64% move from the prior day. This move outpaced the S&P 500's daily loss of 2.93%. Meanwhile, the Dow lost 3.04%, and the Nasdaq, a tech-heavy index, lost 0.27%.

Prior to today's trading, shares of the oil and gas exploration company had lost 72.55% over the past month. This has lagged the Oils-Energy sector's loss of 50.43% and the S&P 500's loss of 31.71% in that time.

Wall Street will be looking for positivity from DVN as it approaches its next earnings report date. The company is expected to report EPS of $0.11, down 69.44% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.56 billion, up 3.69% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.65 per share and revenue of $5.97 billion, which would represent changes of -52.9% and -12.95%, respectively, from the prior year.

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

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable 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 past month, the Zacks Consensus EPS estimate has moved 65.57% lower. DVN is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, DVN is currently trading at a Forward P/E ratio of 9.32. Its industry sports an average Forward P/E of 4.7, so we one might conclude that DVN is trading at a premium comparatively.

We can also see that DVN currently has a PEG ratio of 2.27. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Oil and Gas - Exploration and Production - United States industry currently had an average PEG ratio of 0.96 as of yesterday's close.

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 170, putting it in the bottom 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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