Markets
APA

Can Devon Energy (DVN) Beat Q1 Earnings Estimates? - Analyst Blog

An image of multiple stacks of coins
Credit: Shutterstock photo

Devon Energy CorporationDVN will release first-quarter 2015 earnings results after the market closes on May 5, 2015. This independent energy company reported a negative earnings surprise of 24.55% last quarter. However, we expect Devon Energy to beat expectation this quarter.

Why a Likely Positive Surprise?

Our proven model shows that Devon Energy is likely to beat earnings because it has the right combination of two key ingredients. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is the case here.

Zacks ESP : Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at +7.69%. This is a meaningful and leading indicator of a likely positive earnings surprise for the shares.

Zacks Rank: The combination of Devon Energy's Zacks Rank #3 and +7.69% ESP makes us confident of an earnings beat.

The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.

What's Driving the Better-than-Expected Earnings?

Devon Energy stands to benefit from its asset transformation initiatives and presently holds a top tier asset portfolio which will support its production growth targets despite a 25% cut in E&P spending in 2015.

The strong hedging position of the company will enable it to withstand the soft commodity prices. The financial strength has allowed Devon to further bolster its existing operations. This has enabled the company to pay regular dividends to its shareholders.

Other Stocks to Consider

Here are some other operators in the space worth considering as our model shows that they have the right combination of elements to post an earnings beat this quarter.

Callon Petroleum Co. CPE has an earnings ESP of +50.0% and a Zacks Rank #2.

Apache Corp. APA has an earnings ESP of +6.45% and a Zacks Rank #3.

Chesapeake Energy Corp. CHK has an earnings ESP of +50.0% and a Zacks Rank #3.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

DEVON ENERGY (DVN): Free Stock Analysis Report

CHESAPEAKE ENGY (CHK): Free Stock Analysis Report

APACHE CORP (APA): Free Stock Analysis Report

CALLON PETE-DEL (CPE): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

APA CHK CPE DVN

Other Topics

Earnings Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More