DVN
Devon Energy Corporation
$42.66
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Mild
·
Conviction
Fair Value
Trading 6.2% below fair value
You pay
$42.66
Bear
$16.15
Fair
$45.49
Bull
$84.62
Bear
$16.15
-62.1%
FCF $1958M × 8x
Fair
$45.49
+6.6%
FCF $2797M × 11x
Bull
$84.62
+98.4%
FCF $3636M × 14x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
12.1x
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 $60.00 from 64 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $45.49 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.
Wall Street's average price target is $60.00 (from 64 analysts). Our estimate is 37% 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