Oppenheimer reported on Friday that they have reduced their price target for energy company, Devon Energy Corporation(DVN).
The firm has cut its price target on DVN from $75 to $67. This price target suggests a 19% increase from the stock’s current price of $54.29. Analysts have lowered the company’s price target based on lower natural gas prices in the US.
An analyst from the firm commented, “DVN’s earnings and cash flow are highly leveraged to US natural gas prices,” the analyst notes. “It has 38% of its estimated 2013 gas production hedged at $3.90/mcf and 10% of its 2014 gas volume hedged at $4.09/mcf. DVN has $6B in foreign bank accounts and is waiting for potential tax reform before repatriating this cash, which could be used to fund a large buyback program to boost its stock price. DVN shares do not reflect any takeover premium, as they are 55% below their 2007 peak. Our estimates reflect updated commodity prices.”
Devon Energy shares were mostly flat during Friday morning trading. The stock has declined -15% in the past year.
The Bottom Line
Shares of Devon Energy (DVN) have a 1.47% dividend yield, based on the latest intraday stock price of $54.54. The stock has technical support in the $50 price area. If the shares can firm up, we see overhead resistance around the $59-$60 price levels.
Devon Energy Corporation(DVN) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 out of 5 stars.