DVN
Devon Energy Corporation
$47.22
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Mild
·
Conviction
Fair Value
Trading 1.8% below fair value
You pay
$47.22
Bear
$18.05
Fair
$48.08
Bull
$88.14
Bear
$18.05
-61.8%
FCF $2183M × 8x
Fair
$48.08
+1.8%
FCF $3119M × 11x
Bull
$88.14
+86.7%
FCF $4055M × 14x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
11.8x
Summary
Our base-case estimate uses a valuation based on free cash flow under different commodity price assumptions and a valuation multiple. We then blend that result with the average analyst price target of $56.82 from 64 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $48.08 per share.
Warnings
Where you think oil prices will settle long-term drives over 80% of this valuation. The biggest risk isn't the company itself — it's getting the commodity price wrong.
Key Risks
- Growth DCF inappropriate — commodity volumes do not compound
- Geopolitical premiums are real but historically temporary
- Reserve replacement ratio below 100% for 3 years is existential