Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 5 Dec, 24 | DVN | Buy | USD 36.29 | USD 39.92 | USD 45.16 | 45 days | 24.4% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Devon Energy Corporation, an independent energy company, engages in the exploration, development, and production of oil, natural gas, and natural gas liquids in the United States. It operates in Delaware, Eagle Ford, Anadarko, Williston, and Powder River Basins. The company was founded in 1971 and is headquartered in Oklahoma City, Oklahoma.
Increased Asset Turnover Ratio: 0.15x in 3QFY24 vs Industry Median of 0.10x
Increased Current Ratio: 1.11x in 3QFY24 vs 0.96x in 3QFY23
Decreased Net Income Margin: 20.5% in 3QFY24 vs 24.0% in 3QFY23
Decreased Return on Equity: 6.1% in 3QFY24 vs 8.0% in 3QFY23
Climate Changes, Inflationary Pressure, Technological Challenges, Regulatory Changes, etc.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 36.29 | 30.23 | 39.92 | 45.16 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Key Financial Indicators: DVN’s total revenue increased by 4.90% YoY and stood at USD 4,024mn in 3QFY24 vs USD 3,836mn in 3QFY23. This growth was driven by increased oil production from strategic acquisitions, and stable marketing and midstream revenues. Net cash inflow from financing activities was recorded at USD 2,192mn in 3QFY24 vs outflow of USD 553mn in 3QFY23.
Growth Catalysts: As a result of the Grayson Mill acquisition and steady year-to-date performance, DVN is raising its production forecast for 4QFY24 to a range of 811,000 to 830,000 Boe per day, reflecting a 13% increase compared to 3QFY24. This growth in 4QFY24 volume would be assisted by a forecasted 110,000 Boe per day of additional production from Williston Basin acquisition.
Considering the increased production capacity, disciplined capital expenditure, successful acquisition, expected production in 4QFY24, upside potential as indicated by the valuation, current trading levels and key risks associated with the business,a 'Buy' recommendation has been given on the stock at the closing market price of USD 36.29 as of 04 December 2024.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Energy Industry: Oil & Gas E&P
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| DVN Devon Energy Corporation |
-0.075 0.20% | 37.33 | 7.03 | 7.04 | 1.72 | 1.75 | 2.13 | 4.41 |
| COP ConocoPhillips |
0.12 0.11% | 105.14 | 12.82 | 11.12 | 2.24 | 2.90 | 2.47 | 5.63 |
| CNQ Canadian Natural Resources Ltd |
0.38 1.23% | 31.18 | 15.51 | 14.24 | 2.37 | 2.92 | 2.26 | 5.34 |
| EOG EOG Resources Inc |
0.66 0.51% | 128.90 | 9.09 | 8.98 | 3.01 | 2.57 | 2.97 | 5.16 |
| PEXNY PTT Exploration & Production |
- -% | 12.69 | 25.79 | 24.51 | 5.92 | 3.66 | 0.05 | 0.08 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is neither an indicator nor a guarantee of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 04 December 2024. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
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