Devon Energy (DVN) Outpaces Stock Market Gains: What You Should Know
Devon Energy (DVN) closed at $47 in the latest trading session, marking a +1.84% move from the prior day. This move outpaced the S&P 500's daily gain of 0.89%. At the same time, the Dow added 1.2%, and the tech-heavy Nasdaq lost 0.68%.
Heading into today, shares of the oil and gas exploration company had lost 13.46% over the past month, lagging the Oils-Energy sector's loss of 9.72% and the S&P 500's loss of 3.9% in that time.
Devon Energy will be looking to display strength as it nears its next earnings release. On that day, Devon Energy is projected to report earnings of $1.55 per share, which would represent a year-over-year decline of 17.55%. Our most recent consensus estimate is calling for quarterly revenue of $4.22 billion, up 10.75% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $6.96 per share and revenue of $17.47 billion, which would represent changes of -16.25% and -8.86%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Devon Energy. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 9.58% lower within the past month. Devon Energy is currently a Zacks Rank #3 (Hold).
Valuation is also important, so investors should note that Devon Energy has a Forward P/E ratio of 6.63 right now. Its industry sports an average Forward P/E of 5.22, so we one might conclude that Devon Energy is trading at a premium comparatively.
It is also worth noting that DVN currently has a PEG ratio of 0.13. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Oil and Gas - Exploration and Production - United States stocks are, on average, holding a PEG ratio of 0.29 based on yesterday's closing prices.
The Oil and Gas - Exploration and Production - United States industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 227, which puts it in the bottom 10% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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