Traders Purchase High Volume of Devon Energy Call Options (NYSE:DVN)

Key Points

• Options activity surged: Traders bought 36,643 Devon Energy call options, 49% above the typical daily volume.
• Quarterly results beat expectations: Devon reported EPS of $1.42 versus analyst estimates of $1.33, with revenue up 66.5% year over year; the company also generated about $2 billion in free cash flow.
• Shares fell despite the results: DVN dropped 1.7% to $42.15. Analysts’ consensus rating was “Moderate Buy,” with an average price target of $60.61.

Devon Energy Corporation (NYSE:DVN - Get Free Report) saw unusually large options trading activity on Friday. Stock traders bought 36,643 call options on the company. This represents an increase of 49% compared to the typical daily volume of 24,561 call options.

Analyst Ratings Changes

Several brokerages have recently commented on DVN. Citigroup upped their target price on Devon Energy from $65.00 to $67.00 and gave the company a "buy" rating in a report on Monday, August 31st. Truist Financial cut their price objective on Devon Energy from $65.00 to $61.00 and set a "buy" rating on the stock in a report on Wednesday, October 7th. Weiss Ratings raised shares of Devon Energy from a "hold (c+)" rating to a "buy (b-)" rating in a research note on Thursday, October 8th. Wells Fargo & Company reduced their price objective on shares of Devon Energy from $65.00 to $64.00 and set an "overweight" rating for the company in a research note on Monday, September 28th. Finally, Susquehanna raised their target price on shares of Devon Energy from $57.00 to $63.00 and gave the stock a "positive" rating in a report on Tuesday, July 21st. Two investment analysts have rated the stock with a Strong Buy rating, twenty-five have assigned a Buy rating and three have issued a Hold rating to the stock. According to MarketBeat.com, the company currently has an average rating of "Moderate Buy" and an average price target of $60.61.

Insider Transactions at Devon Energy

In other news, EVP Robert Ferrall Lowe III sold 6,756 shares of the company's stock in a transaction that occurred on Monday, September 14th. The shares were sold at an average price of $50.95, for a total value of $344,218.20. Following the completion of the sale, the executive vice president directly owned 72,720 shares of the company's stock, valued at approximately $3,705,084. This represents a 8.50% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. Also, CEO Clay Gaspar acquired 3,913 shares of the firm's stock in a transaction dated Monday, September 14th. The stock was bought at an average price of $51.08 per share, with a total value of $199,876.04. Following the completion of the acquisition, the chief executive officer directly owned 619,152 shares of the company's stock, valued at approximately $31,626,284.16. This represents a 0.64% increase in their ownership of the stock. The SEC filing for this purchase provides additional information. 4.58% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Devon Energy

A number of large investors have recently made changes to their positions in DVN. Sigma Planning Corp grew its holdings in Devon Energy by 3.5% during the second quarter. Sigma Planning Corp now owns 6,902 shares of the energy company's stock valued at $285,000 after purchasing an additional 233 shares during the period. Retirement Planning Group LLC raised its stake in shares of Devon Energy by 4.5% in the 2nd quarter. Retirement Planning Group LLC now owns 5,647 shares of the energy company's stock valued at $233,000 after purchasing an additional 243 shares during the period. JFS Wealth Advisors LLC grew its holdings in shares of Devon Energy by 56.6% during the second quarter. JFS Wealth Advisors LLC now owns 678 shares of the energy company's stock worth $28,000 after buying an additional 245 shares in the last quarter. Physician Wealth Advisors Inc. raised its holdings in shares of Devon Energy by 32.4% in the third quarter. Physician Wealth Advisors Inc. now owns 1,062 shares of the energy company's stock valued at $49,000 after purchasing an additional 260 shares during the last quarter. Finally, 71 West Capital Partners increased its stake in Devon Energy by 2.5% in the 3rd quarter. 71 West Capital Partners now owns 11,004 shares of the energy company's stock valued at $507,000 after buying an additional 268 shares during the last quarter. Institutional investors and hedge funds own 69.72% of the company's stock.

Devon Energy Stock Down 1.7%

Shares of DVN traded down $0.73 during mid-day trading on Friday, reaching $42.15. The company's stock had a trading volume of 10,011,736 shares, compared to its average volume of 12,844,420. The business has a fifty day moving average of $48.74 and a 200 day moving average of $46.01. The company has a market cap of $46.37 billion, a price-to-earnings ratio of 10.03, a price-to-earnings-growth ratio of 1.15 and a beta of 0.43. Devon Energy has a 1 year low of $32.49 and a 1 year high of $52.71. The company has a quick ratio of 0.67, a current ratio of 0.72 and a debt-to-equity ratio of 0.24.

Devon Energy (NYSE:DVN - Get Free Report) last issued its quarterly earnings results on Thursday, November 5th. The energy company reported $1.42 earnings per share for the quarter, beating analysts' consensus estimates of $1.33 by $0.09. The business had revenue of $6.86 billion for the quarter, compared to the consensus estimate of $6.57 billion. Devon Energy had a return on equity of 14.93% and a net margin of 16.67%. Devon Energy's revenue for the quarter was up 66.5% compared to the same quarter last year. During the same quarter in the previous year, the company posted $1.04 earnings per share. As a group, analysts forecast that Devon Energy will post 5.49 earnings per share for the current fiscal year.

Devon Energy Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Wednesday, December 30th. Shareholders of record on Tuesday, December 15th will be given a dividend of $0.32 per share. The ex-dividend date is Tuesday, December 15th. This represents a $1.28 dividend on an annualized basis and a yield of 3.0%. Devon Energy's dividend payout ratio (DPR) is presently 30.40%.

Key Headlines Impacting Devon Energy

Here are the key news stories impacting Devon Energy this week:

• Positive Sentiment: Devon reported third-quarter adjusted earnings of $1.42 per share, above analyst estimates, with production growth contributing to the results. The company also generated about $2 billion in free cash flow and plans to accelerate share repurchases; management raised expected merger synergies. Devon Energy Posts $2 Billion in Free Cash Flow as Buybacks Accelerate
• Positive Sentiment: Devon declared a quarterly dividend of $0.32 per share, equivalent to $1.28 annually and a yield of about 3%.
• Neutral Sentiment: Activist investor TOMS Capital renewed its call for Devon to consider a sale, saying it is willing to engage with interested acquirers. The prospect of a transaction could offer potential upside, but the renewed campaign also adds uncertainty around the company’s strategy. TCIM statement on Devon’s strategic review
• Negative Sentiment: Despite the earnings beat, reports said third-quarter revenue fell short of estimates. That may temper investor enthusiasm, even though revenue grew substantially year over year. Devon Q3 earnings outpace estimates, revenue misses
• Negative Sentiment: Barclays lowered its price target from $60 to $57, though it maintained an “overweight” rating.

Devon Energy Company Profile

Devon Energy Corporation NYSE: DVN is an independent energy company engaged primarily in the exploration, development and production of oil, natural gas and natural gas liquids. The company focuses on onshore operations in the United States and markets the hydrocarbons produced from its assets to customers across the energy sector.

Devon's portfolio has historically included major U.S. resource plays such as the Delaware Basin in the Permian Basin, the Eagle Ford, the Anadarko Basin, the Williston Basin and the Powder River Basin.

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