Citigroup Reiterates Neutral Rating, $58 PT on Devon Energy Corporation
In a report published Wednesday, Citigroup reiterated its Neutral rating and $58.00 price target on Devon Energy Corporation (NYSE: DVN).
Citigroup noted, “We recently met with the management of Devon in Oklahoma City to get an update on its outlook for activity in 2013. Notably, the company's focus is evermore on unlocking value from its vast resource base after its stock sharply underperformed our market-weighted E&P index in 2012. Management mentioned more than once that the sum of the company's parts exceeds its current market value and thus it is ‘looking hard' at potential monetizations. Among the assets being considered are its Canadian conventional holdings, which are currently being allocated minimal capital and will thus negatively impact 2013 production growth by ~2.5%. It is also considering the option of placing certain assets in a royalty trust. However, given the volatile characteristic and largely non-fixed fee nature of its midstream holdings, it remains unlikely the company will look to monetize these assets any time soon.”
Devon Energy Corporation closed on Monday at $52.04.
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