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Earnings Previews: Devon Energy, Diamondback Energy, Mosaic, Williams

Here is a look at four companies set to report March-quarter results after markets close Monday.

Devon Energy

Devon Energy Inc. (NYSE: DVN) is the country’s third-largest independent producer of oil and natural gas. The company’s stock has added about 188% to its share price over the past 12 months, thanks largely to a jump in crude oil prices that began in late September. Devon, and virtually every other producer, got a boost Thursday following Germany’s announcement that it would not oppose a ban on importing Russian oil. If the embargo is enacted, Russian crude that now makes a short trip by tanker to European ports most likely will be sent to Asia at a much higher cost.

Analysts are unsurprisingly bullish on the stock, with 22 of 30 giving the shares a Buy or Strong Buy rating. Another seven have Hold ratings. At a recent price of around $59.90 a share, the upside potential based on a median price target of $73 is 21.9%. At the high target of $91, the upside potential is 51.9%.

Consensus estimates call for first-quarter revenue of $3.57 billion, which would be down 16.5% sequentially but up by 103% year over year. Adjusted EPS are forecast at $1.76, up 26.4% sequentially and 290% higher year over year. For the full 2022 fiscal year, Devon is forecast to post EPS of $8.05, up 128%, on revenue of $14.81 billion, up 21.3%.

Devon’s stock trades at 7.4 times expected 2022 EPS, 7.8 times estimated 2023 earnings of $7.66 and 9.1 times estimated 2024 earnings of $6.60 per share. The stock’s 52-week range is $23.02 to $65.45. Devon pays an annual dividend of $4.00 (yield of 6.68%). Total shareholder return for the past year was 165.9%.

Diamondback Energy

Independent oil and gas producer Diamondback Energy Inc. (NASDAQ: FANG) has seen its share price rise by more than 66% in the past 12 months, mostly thanks to rising crude oil prices. That increase is about 4 percentage points above the industry average.

Last week, Fitch Ratings affirmed its BBB investment-grade debt rating, along with a Stable outlook. The company is being whipsawed to some degree between big shareholders seeking to advance green energy policy and the state of Texas, which has passed a law that would mandate that state funds not be invested in those same companies.

Analysts are bullish on Diamondback, with 27 of 32 brokerages having a Buy or Strong Buy rating on the shares. The other five rate the stock at Hold. At a share price of around $129.50, the upside potential based on a median price target of $171 is 32%. At the high price target of $233, the upside potential is nearly 80%.

First-quarter revenue is forecast at $1.96 billion, down 3% sequentially and 66% higher year over year. Adjusted EPS are expected to come in at $4.68, up 28.8% sequentially and 103% year over year. For full fiscal 2022, analysts currently expect Diamondback to post EPS of $23.39, up 107.6%, on revenue of $8.71 billion, up 28.1%.

The stock trades at 5.5 times expected 2022 EPS, 5.9 times estimated 2023 earnings of $21.84 and 6.5 times estimated 2024 earnings of $19.85 per share. The stock’s 52-week range is $65.93 to $147.99. Diamondback pays an annual dividend of $2.40 (yield of 1.9%).

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