Devon is Trading Above 50 and 200 Day SMA: How to Play the Stock?

Devon Energy Corporation DVN is trading above its 50-day and 200-day simple moving averages ("SMA"), signaling a bullish trend. 

DVN has a multi-basin portfolio and focuses on high-margin assets that hold significant long-term growth potential. Devon Energy also has a diverse commodity mix, having a balanced exposure to oil, natural gas and natural gas liquid production volumes. The company continues to produce strongly, thanks to the contribution from its multi-basin assets.

DVN’s 50 and 200 Day SMA
 

The 50-day and 200-day SMAs are key indicators for traders and analysts to identify support and resistance levels. It is considered particularly important as this is the first marker of an uptrend or downtrend of the stocks.

In the past month, Devon Energy’s shares have outperformed the Zacks Oil & Gas- Exploration and Production- United States industry’s rally.

DVN’s Price Performance ( One Month)

While the past-month performance paints a positive picture for investors, looking at the past year’s performance is crucial for a fuller understanding. DVN’s stock has declined 24.6% in the past year, suggesting that it is on a gradual path to recovery.

Another company, Occidental Petroleum OXY, operating in the same sector, has gained 3.4% in the past month.

Should you consider adding DVN to your portfolio only based on positive price movements? Let’s delve deeper and find out the factors that can help investors decide whether it is a good entry point to add DVN stock to their portfolio.

Key Growth Catalysts Driving DVN Stock

Devon Energy has established itself as a leading U.S. shale producer through its strategic emphasis on multi-basin oil and gas assets, delivering geographic diversity, operational scale, and capital flexibility. The company’s core operations span five key basins: Delaware, Eagle Ford, Anadarko, Williston and Powder River. This diversified presence mitigates operational risks and buffers against localized regulatory or weather-related disruptions.

Devon Energy also benefits from a well-balanced commodity mix, with exposure to oil, natural gas, and natural gas liquids. The company remains focused on expanding its portfolio with high-quality resources.

Devon Energy has pursued a disciplined acquisition strategy to expand its asset base, boost operational scale and enhance shareholder returns. The acquisition of WPX Energy expanded Devon’s operation in the Delaware Basin, while the acquisition of Validus Energy expanded its footprint in the Eagle Ford shale. DVN also acquired the Williston Basin business of Grayson Mill Energy in 2024. These acquisitions complement Devon Energy’s core operations by diversifying production sources, increasing inventory depth and improving cash flow resilience across commodity cycles. 

Devon Energy’s low-cost operating strategy continues to enhance its profitability. Through the divestiture of higher-cost assets and the development of more efficient, lower-cost production, the company has significantly improved its cost structure. Ongoing initiatives to lower drilling and completion costs, along with workforce optimization aligned with strategic priorities, are further reinforcing Devon’s strong operating margins.

DVN Stock Returns Better Than Industry

The Return on Invested Capital (“ROIC”) measures how well a company generates returns on the money it invests. ROIC is a key indicator of a company's profitability and operational efficiency. The ROIC of the company indicates that it is investing money more efficiently than its peers in the industry.

Devon Energy’s ROIC has outperformed the industry average in the trailing 12 months. ROIC of DVN was 8.71% compared with the industry average of 7.16%.

Another company operating in the same industry, Range Resources RRC, had a trailing 12-month ROIC of 9.41%, outperforming the industry's returns.

DVN Stock's Valuation 

Devon Energy is currently trading at a discount relative to its industry based on its trailing 12-month Enterprise Value to EBITDA (EV/EBITDA TTM) basis. With a valuation of 3.73X, it is lower than the industry average of 11.21X and is trading below its five-year median of 4.82X.

Devon Energy is attractively valued compared with Range Resources. RRC is currently trading at an EV/EBITDA TTM of 9.92X.

DVN Stock's Earnings Estimate Decline

The Zacks Consensus Estimate for Devon Energy’s 2025 and 2026 earnings per share has decreased 9.09% and 6.94%, respectively, in the past 60 days.

The Zacks Consensus Estimate for Occidental Petroleum’s 2025 and 2026 earnings per share has decreased 7.76% and 11.97%, respectively, in the past 60 days.

Wrapping Up

Devon Energy gains significant value from its diverse multi-basin asset portfolio, which delivers strong free cash flow and supports ongoing balance sheet improvement. Its well-balanced production mix across oil, natural gas, and NGLs further enhances operational flexibility and strengthens its competitive position.

Despite a negative revision in earnings estimates, investors can remain invested in the Zacks Rank #3 (Hold) stock as it currently has a VGM Score of B and is trading at a discount. 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research