Analyst Note
| Dave Meats, CFA |Devon shares outperformed peers after reporting first-quarter earnings. The firm reported strong first-quarter production of 575 mboe/d, within 1 percentage point of guidance and 6% lower sequentially as the firm factored in an expected downtick from severe winter weather—second-quarter production is anticipated to recover about 15 mboe/d as those weather curtailments subside. Like many of its peers, Devon has reiterated a commitment to moderated oil growth (5% annually), as it focuses primarily on cash returns, balance sheet improvements, and increases in operational efficiencies in the backdrop of elevated commodity prices. We intend to incorporate these results shortly, but after this first look our fair value estimate and moat rating are unchanged.