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    Devon Energy Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 163.94

    Market price

    USD 48.63

    Implied upside

    +237.1%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedCapital expenditure runs at 30.5% of revenue against depreciation of 17.4%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 163.94+237.1%
    Exit multiple
    USD 146.67+201.6%
    Market price
    USD 48.63

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn3bn7bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 25.5bnUSD 26.5bnUSD 27.4bnUSD 28.4bnUSD 29.4bnUSD 30.3bnUSD 31.2bnUSD 32.1bnUSD 33.0bnUSD 33.8bn+3.2%
    EBITUSD 7.8bnUSD 8.1bnUSD 8.4bnUSD 8.7bnUSD 9.0bnUSD 9.3bnUSD 9.5bnUSD 9.8bnUSD 10.1bnUSD 10.3bn+3.2%
    NOPATUSD 6.2bnUSD 6.4bnUSD 6.6bnUSD 6.9bnUSD 7.1bnUSD 7.3bnUSD 7.5bnUSD 7.8bnUSD 8.0bnUSD 8.2bn+3.2%
    Add depreciation & amortisationUSD 4.4bnUSD 4.6bnUSD 4.8bnUSD 4.9bnUSD 5.1bnUSD 5.3bnUSD 5.4bnUSD 5.6bnUSD 5.7bnUSD 5.9bn+3.2%
    Less capital expenditureUSD -7.8bnUSD -7.8bnUSD -7.8bnUSD -7.8bnUSD -7.7bnUSD -7.6bnUSD -7.5bnUSD -7.4bnUSD -7.2bnUSD -7.0bn-1.1%
    Capex, % of revenue30.5%29.5%28.4%27.3%26.2%25.1%24.1%23.0%21.9%20.8%-
    Less increase in working capitalUSD -612.0mUSD -72.5mUSD -72.0mUSD -71.2mUSD -70.2mUSD -68.9mUSD -67.2mUSD -65.4mUSD -63.2mUSD -60.7m-22.6%
    Free cashflow to firmUSD 2.2bnUSD 3.1bnUSD 3.6bnUSD 4.0bnUSD 4.4bnUSD 4.9bnUSD 5.4bnUSD 5.9bnUSD 6.4bnUSD 7.0bn+13.6%
    Discount factor0.96590.90100.84050.78410.73150.68240.63660.59390.55400.5168-
    Present valueUSD 2.1bnUSD 2.8bnUSD 3.0bnUSD 3.1bnUSD 3.3bnUSD 3.4bnUSD 3.4bnUSD 3.5bnUSD 3.6bnUSD 3.6bn-
    Present Value Of The ForecastUSD 31.8bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.650Reported 0.477, pulled toward 1.0 (Blume)
    Cost of equity7.64%Risk-free + beta x equity risk premium
    Cost of debt5.59%Interest expense / average total debt
    Market capitalisationUSD 53.5bn86.2% of capital
    Total debtUSD 8.6bn13.8% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC7.20%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 163.94

    71% of EV

    Forecast FCFF, final year
    USD 7.0bn
    Capex at depreciation, working capital in reinvestment
    USD 8.2bn
    Less reinvestment at g/ROIC (14.1% of NOPAT)
    USD -1.1bn
    Capitalised
    USD 7.0bn
    ROIC (reported)
    17.8%
    Terminal value, undiscounted
    USD 153.1bn
    Terminal value, discounted
    USD 79.1bn
    Enterprise value
    USD 110.9bn
    Less net debt
    USD 7.2bn
    Equity value
    USD 103.8bn

    Exit at 8.1x EBITDA

    Value per shareUSD 146.67

    68% of EV

    Terminal value, undiscounted
    USD 132.0bn
    Terminal value, discounted
    USD 68.2bn
    Enterprise value
    USD 100.0bn
    Less net debt
    USD 7.2bn
    Equity value
    USD 92.8bn

    Spread between methods: 11%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.20%247.14271.30304.78353.95432.69
    6.20%187.94199.82215.16235.59263.93
    7.20%149.76156.09163.94173.86186.71
    8.20%123.17126.64130.86136.06142.53
    9.20%103.63105.52107.80110.58113.98

    Outlined: this model. Green text: above today's price of 48.63. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year-3.6%7.0%-5.3%
    EBIT margin41.3%30.6%13.0%
    Discount rate-7.2%14.9%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.