UPDATE: UBS Upgrades Devon Energy (DVN) to Neutral

(Updated - January 19, 2017 6:21 AM EST)

UBS upgraded Devon Energy (NYSE: DVN) from Sell to Neutral, price target $46.00 (from $35.00)

Analyst William Featherston comments "We downgraded DVN from Neutral to Sell in late 2015 with our thesis being that its declining production profile, above average financial leverage, & high exposure to lower margin natgas, NGLs, & Canadian oil sands did not warrant a premium valuation vs. peers. Since then, most of these concerns have been addressed: 1) US oil should grow >10% vs 4Q16 this year and overall 2017 production should rise 3-5% vs 4Q16; 2) its YE17 net debt/EBITDX ratio at strip prices should now be ~2.0x (just below with peers); & 3) it now trades in line with peers on 2017-18 EV/DACF at strip prices & on P/NAV (fair in our view given its avg unbooked-to-proved ratio & debt-adjusted growth outlook). Moreover, its high exposure to NGLs & oil sands make it a vehicle for playing a recovery in liquids prices in 2017+."

For an analyst ratings summary and ratings history on Devon Energy click here. For more ratings news on Devon Energy click here.

Shares of Devon Energy closed at $46.48 yesterday.

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