Devon Energy Corporation: Solid Pro Forma Guide; Return Framework a Strong Start

Research evidence excerpt

Devon Energy Corporation: Solid Pro Forma Guide; Return Framework a Strong Start

Equity Research

U.S. Integrated Oil & E&P

9 June 2026

Devon Energy Corporation

Solid Pro Forma Guide; Return

Framework a Strong Start

2026 pro forma guide showed in-line production on lower DVN OVERWEIGHT

opex and capex. We trimmed 2026 CFPS by 3% on weaker Unchanged

gas/NGL realization in 2Q and cash taxes but underlying U.S. Integrated Oil & E&P UnchangedPOSITIVE

integration momentum is setting up well for 2027. Price Target USD 62.00

Introducing a FCF return target shows intent and capacity to Unchanged

expand over time. Price (09-Jun-26) USD 44.07 Potential Upside/Downside +40.7%

Source: Bloomberg, Barclays Research

DVN released pro forma guidance and an updated 2026 outlook after market close. Overall,

guidance came in broadly in line with our pro forma estimates for 2Q26 and FY2026, and Market Cap (USD mn) 50830

demonstrated integration momentum that sets up well into 2027. LOE and capex were both Shares Outstanding (mn) 1153.40

modestly better than our expectations, supporting accelerated synergy capture, with ~$600MM Free Float (%) 99.27

now expected to be realized in 2027 on average, while the full $1bn target remains unchanged 52 Wk Avg Daily Volume (mn) 10.4

by year-end 2027. Dividend Yield (%) 2.91

Return on Equity TTM (%) 15.13

DVN also introduced a target cash return of “up to 70%” of FCF through its base dividend and Current BVPS (USD) 24.84

buyback program. In our follow-up with management, the company noted that the 70% level is Source: Bloomberg

intended to align with historical DVN return levels while preserving flexibility for debt reduction,

though it is open to revisiting this framework next year. Importantly, establishing an explicit Price Performance Exchange-NYSE