On Friday, Stifel has adjusted its price target for Devon Energy (NYSE:DVN), reducing it to $65 from the previous $75, while still recommending the stock as a Buy. The revision follows an evaluation of the company's recent quarterly performance and updated guidance.
The firm anticipates Devon Energy to exhibit an improved forward-looking Net Debt to EBITDAX ratio, forecasting a decrease from 0.6x in the estimated year 2024 to 0.1x in 2026.
The analysis by Stifel suggests that during the period from the estimated year 2024 to 2026, Devon Energy is poised to generate positive free cash flows and achieve a compound annual growth rate (CAGR) of 3% in production. This outlook supports the firm's continued endorsement of the stock as a Buy.
The new price target of $65 per share represents a downward adjustment, which Stifel attributes to the latest operational and financial information disclosed by Devon Energy.
Despite the reduction, the target still implies a significant potential upside, as it is pegged at a 20% discount to Stifel's calculated net asset value (NAV) for Devon Energy, which stands at $81.74 per share.
In summary, Stifel's revision of the price target for Devon Energy to $65, down from $75, is based on a comprehensive analysis of the company's financial health and market position.
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