UBS reiterated a Sell rating on Devon Energy (NYSE: DVN), and raised the price target to $35.00 (from $32.00), following the company's 3Q earnings report. DVN reported a $0.03 EPS beat, driven by lower than expected costs & higher oil price realizations. DVN's 4Q16 production guidance of 524-546 MBoed is below consensus of ~553 MBoed.

Analyst William Featherston commented, "Clean 3Q EPS of $0.09 was above consensus & our estimate of $0.06 with the beat vs. UBSe driven by lower than expected costs & higher oil price realizations; however, CFPS of $0.81 was below our $0.84 on lower DD&A. EBITDX of $703MM exceeded consensus of $692MM. Core 3Q volumes (adjusted for divested assets) were down ~7% YoY to 550 MBoed while total production was down 15% YoY to 577 MBoed, in line with the 560-590 MBoed guidance range but below UBSe/consensus of ~582/581 MBoed. Price realizations fell 31% YoY to $3.68/Mcfe, 8% above UBSe. Unit costs fell 16% YoY to $3.78/Mcfe, 2% below our forecasts."

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Shares of Devon Energy closed at $37.69 yesterday.