Devon: Multiyear, Attractive Inventory and Low-Cost Operations Give Us Continued Confidence

After taking a fresh look, we raise our Devon fair value estimate by 2% to $56 per share. Our fair value estimate corresponds to a premium 2024 enterprise value/EBITDA multiple of just over 5 times, even as the stock affords an insufficient margin of safety. We attribute our revised fair value estimate to slightly higher return and growth assumptions in stage II. That said, our 2024 production forecast of 676 thousand barrels of oil equivalent per day remains unchanged. Our expected production drives our anticipated 2024 EBITDA of about $8.1 billion, or 2024 free cash flow of $3.4 billion.