DVN
Devon Energy Corporation
$50.92
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Overvalued
Trading 101.7% above fair value
You pay
$50.92
Bear
$9.57
Fair
$25.24
Bull
$46.14
Bear
$9.57
-81.2%
FCF $2235M × 8x
Fair
$25.24
-50.4%
FCF $3192M × 11x
Bull
$46.14
-9.4%
FCF $4150M × 14x
Adjust Assumptions
75.0$/bbl
11.0x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
19.8x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (64 analysts)
$62.56
Divergence from AlphaVal
60%
Summary
At $75/bbl oil with a 11x EV/FCF multiple, intrinsic value is $25.24 per share. Range: $9.57 (bear) to $46.14 (bull).
Warnings
If oil drops to $60/barrel, the stock could fall -81%. Check whether the company can survive at low prices and still pay its dividend.
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.
Wall Street's average price target is $62.56 (from 64 analysts). Our estimate is 60% below the consensus -- consider that gap carefully.
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