Oil and natural gas giant Devon Energy (NYSE:DVN) delivered better-than-expected results for the first quarter, with quarterly oil production hitting an all-time high. Further, the company made some upbeat capital deployment announcements based on its strong Q1 performance.
Adjusted earnings of $1.46 per share decreased 22.3% year-over-year but surpassed the consensus estimate of $1.39 per share. Further, revenues rose marginally year-over-year to $3.82 billion and came above the Street’s expectations of $3.43 billion.
The increase in revenues reflects higher production, which rose 11.5% to 641,000 barrels of oil equivalent (BOE) per day. The company said that oil production averaged 320,000 barrels per day in the first quarter and exceeded Devon Energy’s midpoint guidance by 2,000 barrels. Additionally, production costs averaged $12.02 per BOE, down 2% sequentially, driven by lower production taxes.
It is worth highlighting that, based on the strong results, the company increased share-repurchase authorization by 50% to $3 billion. Also, it announced a fixed-plus-variable dividend of $0.72 per share. The dividend amount includes a $0.11 per share benefit from divestiture contingency payments received in the quarter.
Is Devon a Good Stock to Buy?
Wall Street analysts are cautiously optimistic about Devon Energy stock and have a Moderate Buy consensus rating, based on eight Buys and 10 Holds. Further, DVN stock’s average price target of $66.56 implies 30.5% upside potential from current levels.
To know the right time to buy and sell Devon Energy, investors can follow the stock’s most accurate analyst (on a one-year timeframe), Gabriele Sorbara of Siebert Williams Shank & Co. Sorbara has had a 70% success rate over the past year, with an average return of 105.2% per transaction.