Devon Energy Corporation

Analyst Listing

The following analysts provide coverage for the subject firm as of May 2016:

Broker Analyst Analyst Email
Stephens Inc Ben Wyatt ben.wyatt@stephens.com
Susquehanna Financial Group Biju Perincheril biju.perincheril@sig.com
Johnson Rice & Company Charles Meade cmeade@jrco.com
Cowen & Company Charles Robertson charles.robertson@cowen.com
Piper Jaffray David Kistler david.w.kistler@simmonspjc.com
Wells Fargo Securities David Tameron david.tameron@wellsfargo.com
GMP Securities Derrick Whitfield dwhitfield@gmpsecurities.com
Credit Suisse Edward Westlake edward.westlake@credit-suisse.com
IBERIA Capital Partners Eric Fox eric.fox@iberiabank.com
Alembic Global Advisors James Sullivan james.sullivan@alembicglobal.com
KLR Group John Gerdes jjg@klrgroup.com
Jefferies Jonathan D. Wolff jwolff@jefferies.com
Raymond James Kevin Smith kevin.smith@raymondjames.com
Nomura Research Lloyd Byrne lloyd.byrne@nomura.com
Seaport Global Securities Michael Kelly mkelly@seaportglobal.com
Mitsubishi UFJ Securities (USA) Michael McAllister mmcallister@us.sc.mufg.jp
Wolfe Research Paul Sankey psankey@wolferesearch.com
Scotia Howard Weil Peter Kissel peter.kissel@scotiabank.com
BMO Capital Markets Phillip Jungwirth phillip.jungwirth@bmo.com
Capital One Securities Phillips Johnston phillips.johnston@capitalone.com
Deutsche Bank Research Ryan Todd ryan.todd@db.com
RBC Capital Markets Scott Hanold scott.hanold@rbccm.com
Evercore ISI Stephen Richardson stephen.richardson@evercoreisi.com
Guggenheim Securities Subash Chandra subash.chandra@guggenheimpartners.com
Wunderlich Securities Vedran Vuk vedranvuk@wundernet.com

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Primary Input Data

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Derived Input Data

Derived Input

Label

2015 Value

2016
Value

Equational Form

Net Operating Profit Less Adjusted Taxes NOPLAT 222 434 NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)
Free Cash Flow FCF (1,032) (2,225) FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS
Tax Shield TS (378) 45 TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income
Invested Capital IC 26,237 23,297 IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital
Return on Invested Capital ROIC 0.84% 1.86% ROIC\,=\,\frac { NOPLAT }{ IC }
Net Investment NetInv (15,392) (1,148) NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation
Investment Rate IR -6,944.28%  -264.39% IR\,=\,\frac {NetInv}{NOPLAT}
Weighted Average Cost of Capital
WACCMarket 3.78% 4.06% WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)
 WACCBook     7.98%     9.43%
Enterprise value
EVMarket 23,637 33,029 EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash
 EVBook     23,160    32,080
Long-Run Growth
g = IR x ROIC
   -58.67%    -4.93% Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
g = % \Delta GDP      2.50%     2.50%
Margin from Operations M     2.70%    6.35% M\,\,=\,\,\frac{EBIT}{SALES}
Depreciation/Amortization Rate D    90.01%   72.85% D\,\,=\,\,\frac{D+A}{EBITDA}

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Valuation Multiple Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs.

Equational Form

Observed Value

Single-stage

multiple g solution

Two-stage valuation

model g solution

12/31/2015 12/31/2016 12/31/2015 12/31/2016 12/31/2015 12/31/2016

EV/SALES 

\frac {EV}{Sales} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)

 1.87  3.14  -25.87%  9.31%  365.50%  7.06%

EV/EBITDA

\frac {EV}{EBITDA} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)

6.92 13.43 -25.87% 9.31% 365.50% 7.06%

EV/NOPLAT

\frac {EV}{NOPLAT} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}

106.64 76.07 -25.87% 9.31% 365.50% 7.06%

EV/FCFOPS

\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)

-22.90 -14.84 -25.87% 9.31% 365.50% 7.06%

EV/EBIT

\frac {EV}{EBIT} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)

69.32 49.44 -25.87% 9.31% 365.50% 7.06%

EV/IC

\frac {EV}{IC} \,= \,\frac{ROIC\,  -\,  g}{WACC\,-\,g}

0.90 1.42 -25.87% 9.31% 365.50% 7.06%

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