On Monday, Truist Securities revised its price target for Devon Energy (NYSE: NYSE:), a leading energy company, decreasing it to $60.00 from the previous target of $64.00. Despite the reduction, the firm maintains a Buy rating on the stock.
The adjustment in the price target reflects changes in the firm’s financial model, which now includes updated forecasts for the years 2024, 2025, and 2026. The new price target is based on a combination of two methodologies. The first is a 25 times EV/EBITDAX multiple of 5.0x, which is above the peer average of 4.1x, applied to the firm’s estimated 2025 EBITDAX of $9,853 million. This estimate surpasses the consensus of $8,615 million.
The second methodology employed in determining the price target is a Free Cash Flow to Enterprise Value (FCF/EV) Yield assumption of 11.0%. This dual-approach valuation aims to provide a comprehensive view of the…
