Raymond James has raised its 12-month price target for Devon Energy (NYSE:DVN) to $52.00, up from $44.00, while retaining an Outperform rating on the shares. The broker said the higher target is consistent with an assessment that Devon is undervalued relative to current market levels; the stock was trading at $43.48, close to its 52-week high of $44.02.
The upward revision follows Devon’s announced all-stock merger with Coterra Energy (NYSE:CTRA). The transaction, which Raymond James and other market observers have highlighted as a catalyst for revaluing Devon, is expected to close around the end of the second quarter of 2024. Devon has delivered significant recent price momentum, with its shares rising about 34% over the last six months.
Under the terms of the agreement, Coterra shareholders will receive 0.70 share of Devon common stock for each share of Coterra common stock. On a pro forma basis, Devon shareholders are set to own approximately 54% of the combined company, while Coterra shareholders would hold roughly 46%.
The merger implies a combined enterprise value near $58 billion and would establish one of the largest exploration and production companies operating in the U.S. Lower 48, ranking behind ConocoPhillips for Lower 48 production volumes.
Raymond James provided production forecasts for the combined company, projecting roughly 1,249 thousand barrels of oil equivalent per day (boe/d) in 2026, including about 473 thousand barrels per day of oil. The firm expects production to increase to approximately 1,667 thousand boe/d by 2027.
Other analyst commentary and estimates
Following the merger announcement, UBS reiterated a Buy rating on Devon with a price target of $46.00, noting the broader asset base and diversified production mix that the transaction would create. Benchmark also maintained a Buy rating and kept a $44.00 price target, but adjusted its fourth-quarter earnings-per-share estimate from $1.01 to $0.73. Benchmark attributed the EPS revision to mark-to-market movements in commodities and differentials, while it left forecasts for volumes, costs, and capital expenditure levels unchanged.
UBS additionally reaffirmed its Buy stance ahead of Devon’s fourth-quarter 2025 results and pointed to the company’s cost reduction program as a potential lever for lowering future spending.
Implications for markets and operations
The consolidation would materially increase the scale of the combined E&P operator in the Lower 48, affecting production rankings and positioning the merged company as a major producer. Analysts’ price-target movements and reiterated Buy ratings reflect expectations that the merger will reshape Devon’s asset mix and production profile.
At the same time, near-term earnings estimates have been adjusted by at least one firm to account for mark-to-market commodity impacts, underlining short-term volatility in quarterly results even as analysts emphasize longer-term synergies and production growth.
Summary of facts
- Raymond James raised its Devon Energy price target to $52.00 from $44.00 and kept an Outperform rating.
- The upgrade aligns with an assessment that Devon is undervalued; the stock traded at $43.48, near a 52-week high of $44.02.
- Devon and Coterra have agreed to an all-stock merger valued at about $58 billion, expected to close around the end of Q2 2024.
- Coterra shareholders will receive 0.70 shares of Devon for each Coterra share; pro forma ownership will be about 54% Devon and 46% Coterra.
- Raymond James projects combined production of ~1,249 thousand boe/d in 2026 (with ~473 thousand barrels per day of oil) rising to ~1,667 thousand boe/d in 2027.
- UBS and Benchmark have both reiterated Buy ratings; UBS set a $46.00 target, Benchmark a $44.00 target and trimmed a Q4 EPS estimate to $0.73 from $1.01 due to mark-to-market effects.
Context limitations
The facts presented above reflect analyst ratings, price targets, merger terms, and production projections as reported; they do not include forecasts or projections beyond those figures and expect the transaction to close around the end of the second quarter of 2024 as stated.