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It's been a good week for Devon Energy Corporation (NYSE:DVN) shareholders, because the company has just released its latest quarterly results, and the shares gained 2.5% to US$31.93. Statutory earnings per share fell badly short of expectations, coming in at US$0.77, some 38% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$4.5b. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the 17 analysts covering Devon Energy are now predicting revenues of US$16.7b in 2025. If met, this would reflect a satisfactory 5.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to plunge 25% to US$3.24 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$16.7b and earnings per share (EPS) of US$4.32 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.
See our latest analysis for Devon Energy
The consensus price target held steady at US$43.06, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Devon Energy, with the most bullish analyst valuing it at US$66.00 and the most bearish at US$32.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Devon Energy's revenue growth is expected to slow, with the forecast 6.7% annualised growth rate until the end of 2025 being well below the historical 19% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.7% per year. So it's pretty clear that, while Devon Energy's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.