UPDATE: Evercore ISI Downgrades Devon Energy (DVN) to In Line

Evercore ISI analyst Stephen Richardson downgraded Devon Energy (NYSE: DVN) from Outperform to In Line with a price target of $80.00.

The analyst comments "The key question when we changed view on DVN in 2021 was if / when the shift to yield would be recognized and rewarded by the equity market. Our view was that DVN’s under levered balance sheet (the result of a 5+ year cycle of asset sales into the end of the previous cycle) and commitment to the variable dividend would see sustainability credited for an entity that had delivered little stability in the past. The rerating was swift and material with DVN one of the top stocks in the S&P500 in 2021 and up another 140% YTD. We don’t have much to quibble at in regards to DVN but acknowledge the flip side of the cash return / cost reduction cycle in a stasis or even reversal for margins (and cash distributions). We see the 9.0% 2022 total shareholder yield translating to 7.3% in 2024 based on our bottom’s up view of fundamentals (costs, cash taxes and lower commodity price). DVNs management has proven incredibly consistent and committed to the strategy, and proven the ability to pull more cash out of the business (cost reduction, contingent cash payments on previous divestitures) than anticipated and to reward shareholders accordingly. There is no question on the level of commitment here, just some fundamental headwinds that are likely to slow the upward momentum of the stock."

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 $77.05 yesterday.

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