Devon Energy Corporation DVN
Devon Energy trades at an 11.4x P/E, a 31% discount to the peer median of 16.6x, with FY2025 free cash flow recovered to $2.8B from negative $853M in 2024 as capex normalized from $7.5B to $3.9B. However, gross margin has compressed from 43.7% in 2022 to 25.6% in 2025 and EPS has declined for three consecutive years (from $9.12 to $4.20), while the stock has rallied 9.2% in the past month to $48.19 with RSI at 65.7, leaving limited near-term upside.
The Solitude Pipeline FID is a positive strategic catalyst and smart-money flows are improving (SM score rising from 0.0151 to 0.0432, fund count from 53 to 62 as of Q2 2026), but EV/EBITDA at 7.2x is roughly in line with the peer median of 7.1x, suggesting the P/E discount reflects lower growth expectations rather than a mispricing.
What could go wrong
- Margin erosion continues. Gross margin has fallen from 43.7% (2022) to 25.6% (2025) and operating margin from 41.3% to 22.4%; if commodity prices weaken further, profitability could deteriorate additional notches.
- Overbought technicals. RSI at 65.7 with the stock at $48.19, well above the 50-day MA of $43.72 and 200-day MA of $42.65; a pullback after the recent 9.2% monthly run could test support levels.
- Earnings decline trajectory. EPS has dropped for three straight years from $9.12 (2022) to $4.20 (2025), with net income growth of -8.6% in 2025; the P/E discount may be justified if this trend persists.
- Leverage and capex risk. Total debt stands at $8.78B against equity of $15.53B as of FY2025; a return to elevated capex levels like 2024's $7.5B could swing FCF back to negative territory.
What would change my mind
Where this comes from: peer_relative · fundamentals FY2025 and FY2024 · derived_metrics FY2022 and FY2025 · fundamentals and derived_metrics FY2025. Orin's read on DVN; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All DVN filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $3.1B | 0.1% of fund |
| State Street | $3.0B | 0.1% of fund |
| Vanguard Portfolio Management | $2.4B | 0.1% of fund |
| Wellington Management Group Llp | $2.1B | 0.4% of fund |
| Charles Schwab Investment Management | $1.6B | 0.2% of fund |
| Geode Capital Management | $1.3B | 0.1% of fund |
118 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 80 Form 4 filings, net −$6.5M. Of the 50 on hand, 1 was an open-market purchase and 3 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about DVN
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Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 11.4× | 7.7× | 51.1× |
| EV/EBITDA | 7.2× | 4.4× | — |
| P/S | 2.69× | 1.90× | — |
| P/B | 1.1× | 2.4× | — |
Its P/E sits above all 5 of the last 5 years (+2.44σ from its own mean).
6.9%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $2.8B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$62
$54 – $68 · +28% against today's price
- 46 buy or overweight
- 18 hold
- 0 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| DVNDevon Energy Corporation | $53B | 11.4× | 7.2× | 34.0% | 16.7% | 15% |
| CTRACoterra Energy Inc. | $25B | 14.8× | 5.7× | 39.0% | 21.7% | 11% |
| EXEExpand Energy Corporation | $20B | 7.5× | 3.5× | 63.1% | 20.8% | 15% |
| HALHalliburton Company | $28B | 17.3× | 8.1× | 15.1% | 7.2% | 15% |
| TPLTexas Pacific Land Corporation | $23B | 42.8× | 30.7× | 100.3% | 60.3% | 36% |
The median is of the 4 peers listed above and nothing else — check it against the column. This company trades 29.2% below it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $106 | $46.99 · +126% | 2026-06-10 |
| Levered DCF | $108 | $46.99 · +131% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.