Goldman Sachs Upgrades Devon Energy, But Is Less Bullish On EOG Resources: Here's Why
Portfolio Pulse from Priya Nigam
Goldman Sachs upgraded Devon Energy (DVN) from Neutral to Buy, maintaining a $58 price target, while downgrading EOG Resources (EOG) from Buy to Neutral, keeping the price target at $130. The bank expects well costs to decline by 5%-10% in late 2023 and 2024, but is less bullish on natural gas prices.
June 13, 2023 | 2:22 pm
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NEGATIVE IMPACT
Goldman Sachs downgraded EOG Resources to Neutral, maintaining a $130 price target, as they expect lower free cash flows in 2023 and 2024 due to a less bullish outlook on natural gas prices.
Goldman Sachs downgraded EOG Resources due to their less bullish outlook on natural gas prices, which they believe will result in lower free cash flows for the company in 2023 and 2024. They also see lower impact on the cost structure from deflation due to EOG's supply chain management and self-sourcing efforts.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
Goldman Sachs upgraded Devon Energy to Buy, maintaining a $58 price target, as they believe the stock's underperformance presents a compelling valuation and potential for well costs to reduce.
Goldman Sachs upgraded Devon Energy due to its underperformance compared to peers, which they believe presents a compelling valuation. They also see potential for well costs to reduce as a result of lower raw material costs and modestly lower pricing.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100