Energy
Analysts Are Changing Views on Devon After a Big News Week
Published:
Last Updated:
Devon Energy Corp. (NYSE: DVN) had a rough week. On top of earnings and a shuffling around in management, Devon also announced a capital raise that was upsized. And despite a recovery in oil and many energy stocks, Devon shares hit a 52-week low, and its stock was down almost 15% for the week shortly before Friday’s close. Many analysts on Wall Street have chimed in with ratings changes after the news.
Devon’s upsized public offering was 69 million common shares sold in a public offering at $18.75 per share. The company will use the nearly $1.3 billion for general corporate purposes, which it said was to include shoring up its liquidity, reducing debt and funding its capital program.
The company had a huge net loss of $4.5 billion after a non-cash impairment charge. Still, Devon claimed core earnings of $319 million in the fourth quarter. The company also noted that it delivered oil production growth of 26%, lowered its field-level costs by nearly $400 million last year, has nearly $4 billion of liquidity, lowered its exploration and production capital spending outlook by 75% for 2016 and lowered its general and administrative expense expectations by some $800 million.
If you just looked at a news summary the overall trend might sound good. The reality is that the energy sector continues to suffer. Many analysts kept positive ratings on Devon, even if they lowered their price targets.
24/7 Wall St.Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
