Scotiabank Lowers Devon Energy (DVN) Price Target, Sees Balanced Risk-Reward Outlook

Devon Energy Corporation (NYSE:DVN) is included among the 14 Best Affordable Dividend Stocks to Buy According to Analysts.

On February 23, Scotiabank analyst Paul Cheng lowered his price recommendation on Devon Energy Corporation (NYSE:DVN) to $41 from $45. The analyst reiterated a Sector Perform rating on the stock. He told investors that fourth-quarter results are expected to have a neutral impact on the stock in the near term. Scotiabank sees the current risk and reward as fairly balanced. At the same time, the firm noted that Devon will need to show consistent outperformance to ease investor concerns, particularly around its Delaware Basin exposure and its drilling inventory backlog.

During the Q4 2025 earnings call, President and CEO Clay Gaspar spoke about the planned merger with Coterra Energy. He said the deal would create stronger long-term value than either company could achieve independently. Gaspar explained that the combined company would hold a leading position in the Delaware Basin. He expects the basin to contribute more than half of the total production and cash flow. In addition, Devon expects to generate about $1 billion in annual pretax synergies by the end of 2027, alongside ongoing efficiency efforts. He also pointed to plans to increase shareholder returns through higher dividends and a new share repurchase program.

Gaspar said the company delivered strong operational and financial results in the fourth quarter. Production, operating costs, and capital spending all came in better than expected. This performance helped generate $700 million in free cash flow. He credited production optimization, strong new well performance, and efficient asset management for pushing oil output above the company’s guidance range.

He also noted that Devon achieved a 193% reserve replacement rate for the year. Finding and development costs were slightly above $6 per barrel of oil equivalent, reflecting efficient development across its resource base.

Devon Energy Corporation (NYSE:DVN) operates as a US-based oil and gas producer with a diversified portfolio across multiple basins, led by its acreage in the Delaware Basin. The company focuses on the exploration, development, and production of oil, natural gas, and natural gas liquids.

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