As of June 27, 2025, Devon Energy Corp has a Discounted Cash Flow (DCF) derived fair value of $64.26 per share. With the current market price at $32.48, this represents a potential upside of 97.9%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $64.92 |
| DCF Fair Value (10-year) | $64.26 |
| Potential Upside (5-year) | 99.9% |
| Potential Upside (10-year) | 97.9% |
| Discount Rate (WACC) | 7.1% - 9.4% |
Revenue is projected to grow from $15940 million in 12-2024 to $20756 million by 12-2034, representing a compound annual growth rate of approximately 2.7%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 15940 | 4% |
| 12-2025 | 16640 | 4% |
| 12-2026 | 16574 | 0% |
| 12-2027 | 17030 | 3% |
| 12-2028 | 17371 | 2% |
| 12-2029 | 17855 | 3% |
| 12-2030 | 18212 | 2% |
| 12-2031 | 18576 | 2% |
| 12-2032 | 19294 | 4% |
| 12-2033 | 20165 | 5% |
| 12-2034 | 20756 | 3% |
Net profit margin is expected to improve from 18% in 12-2024 to 19% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 2942 | 18% |
| 12-2025 | 3170 | 19% |
| 12-2026 | 3158 | 19% |
| 12-2027 | 3244 | 19% |
| 12-2028 | 3309 | 19% |
| 12-2029 | 3402 | 19% |
| 12-2030 | 3470 | 19% |
| 12-2031 | 3539 | 19% |
| 12-2032 | 3676 | 19% |
| 12-2033 | 3842 | 19% |
| 12-2034 | 3954 | 19% |
with a 5-year average of $3939 million. Projected CapEx is expected to maintain at approximately 28% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 4637 |
| 12-2026 | 5163 |
| 12-2027 | 5091 |
| 12-2028 | 5273 |
| 12-2029 | 4781 |
| 12-2030 | 4869 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 38 |
| Days Inventory | 11 |
| Days Payables | 37 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 6650 | 529 | 3491 | (199) | 2829 |
| 2026 | 9375 | 702 | 4636 | 90 | 3947 |
| 2027 | 9419 | 721 | 4763 | 81 | 3853 |
| 2028 | 9688 | 736 | 4859 | (38) | 4132 |
| 2029 | 9319 | 756 | 4994 | 64 | 3504 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 64.92 | 99.9% |
| 10-Year DCF (Growth) | 64.26 | 97.9% |
| 5-Year DCF (EBITDA) | 49.23 | 51.6% |
| 10-Year DCF (EBITDA) | 55.93 | 72.2% |
Is Devon Energy Corp (DVN) a buy or a sell? Devon Energy Corp is definitely a buy. Based on our DCF analysis, Devon Energy Corp (DVN) appears to be significantly undervalued with upside potential of 97.9%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $32.48.