Devon: Missing Bullish Support – Unloved Status Triggers Rich Upside Potential

Summary:

• The suspension of DVN’s variable dividends is only temporary in our view, pending a healthier balance sheet, as the management leans “in heavier on its share repurchase program” at these discounted stock prices.
• If anything, its debt leverage ratio remains reasonable compared to the sector median and some of its peers, with it underscoring why the sell off has been overly done.
• While the WTI crude oil spot prices may have moderated from pandemic heights, it is likely to remain well supported in the $70s, thanks to the prolonged OPEC+ cuts.
• DVN’s rich Cash from Operations at $6.67B over the LTM underscores the management’s ability to pay down its debts rapidly while sustaining its shareholder returns ahead.
• Combined with the oversold status, we believe that patient investors may look forward to a rich upside potential upon the reversal in sentiments. Get paid while waiting.

DVN Is Inherently Undervalued – Offering Opportunistic Investors With Upside Potential

We previously covered Devon Energy (NYSE:DVN) in August 2024, discussing its robust performance metrics across the improved hedging result, significantly aided by the still elevated crude

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