ExxonMobil and Devon Energy Set for Significant Cash Flow Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 18 2026
0mins
Source: Fool
- Sustained High Oil Prices: Due to tensions in the Strait of Hormuz, analysts forecast WTI prices to remain between $85 and $150, with current prices at $99, suggesting this high level will persist through 2026, thereby generating substantial free cash flow for both ExxonMobil and Devon Energy.
- ExxonMobil's Strong Performance: In 2025, ExxonMobil reported free cash flow of $23.6 billion, achieving a record production of 4.7 million barrels per day even with oil prices below $90, demonstrating its profitability and competitive edge in a high oil price environment.
- Devon Energy Merger Catalyst: Devon Energy's merger with Coterra is expected to close in Q2 2026, with a projected 31% increase in post-merger dividends to $0.315 per share, and its free cash flow for 2025 surged 465% year-over-year, indicating robust financial performance.
- Optimistic Market Outlook: Given the ongoing disruptions in the Strait of Hormuz and constrained Strategic Petroleum Reserve capacity, both companies are poised for significant earnings growth in the second half of 2026, especially if oil prices remain elevated.
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Analyst Views on DVN
Wall Street analysts forecast DVN stock price to rise
20 Analyst Rating
18 Buy
2 Hold
0 Sell
Strong Buy
Current: 42.890
Low
41.00
Averages
45.53
High
55.00
Current: 42.890
Low
41.00
Averages
45.53
High
55.00
About DVN
Devon Energy Corporation is an oil and gas producer in the United States with a diversified multi-basin portfolio headlined by an acreage position in the Delaware Basin. The Company is primarily engaged in the exploration, development and production of oil, natural gas and natural gas liquids (NGLs). It owns a portfolio of assets located in the Delaware Basin, Rockies, Eagle Ford and Anadarko Basin. The Delaware Basin operates in southeast New Mexico and across the state line into west Texas. It offers exploration and development opportunities from many geologic reservoirs and play types, including the oil-rich Wolfcamp, Bone Spring, Avalon and Delaware formations. Its Rockies development consists of its Williston Basin and Powder River Basin assets. The Eagle Ford operations are located in Texas' DeWitt and Karnes counties. The Anadarko Basin development is located in western Oklahoma. It has a joint venture with Dow to develop a portion of its Anadarko Basin acreage.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Merger Integration Pressure: Devon Energy's recent merger with Coterra Energy has positioned it as one of the largest independent oil producers in the Permian Basin, yet it faces pressure from activist investor Kimmeridge Energy Management to enhance operational performance and consider asset sales.
- Market Reaction: Although Devon Energy's shares have risen 12% year-to-date, they have edged lower since the completion of the Coterra merger, reflecting market concerns regarding its integration capabilities.
- Industry Consolidation Trend: Exxon Mobil and Chevron have completed their mergers with Pioneer Natural Resources and Hess, respectively, leading analysts to speculate that they may be eyeing new acquisition targets, indicating that the trend of consolidation in the oil and gas industry is ongoing.
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- Merger Integration Pressure: Devon Energy's recent merger with Coterra Energy has positioned it as one of the largest independent oil producers in the Permian Basin, yet it faces pressure from activist investor Kimmeridge Energy Management to enhance operational performance and consider asset sales.
- Market Reaction: Although Devon Energy's shares have risen 12% year-to-date, they have edged lower since the completion of the Coterra merger, reflecting market concerns regarding its integration capabilities.
- Industry Consolidation Trend: Exxon Mobil and Chevron have completed their mergers with Pioneer Natural Resources and Hess, respectively, leading analysts to speculate that they may be eyeing new acquisition targets, indicating that the trend of consolidation in the oil and gas industry is ongoing.
See More
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- Investor Stake Increase: TOMS Capital Investment Management has acquired a significant stake in Devon Energy (DVN.N), urging the company to sell assets or consider a sale, indicating strong interest in Devon's future strategy.
- Post-Merger Strategy: Following its $58 billion merger with Coterra Energy, Devon is reassessing its core assets in the Permian Basin in Texas and New Mexico, planning to optimize its portfolio to enhance company value.
- Market Reaction: Devon's stock has risen approximately 17% in 2026, despite investor concerns regarding post-merger business integration, reflecting cautious optimism about its future potential.
- Management Engagement: TOMS Capital has recently engaged with Devon's management to push for faster asset sales, although the difficulty of putting the company up for sale post-merger indicates its influence within the industry.
See More
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- Dow Hits All-Time High: The Dow Jones Industrial Average rose by 0.64%, reaching a new all-time high, reflecting investor confidence in economic recovery, despite mixed overall market performance indicating divergent views among investors on various sectors.
- Chip Stocks Decline: With Marvell Technology and Intel falling over 9% and 8% respectively, the weakness in chipmakers weighed on the broader market, suggesting that the pressure on tech stocks may impact future investment sentiment.
- Weak Housing Data: U.S. May housing starts fell 15.4% month-over-month to a six-year low of 1.177 million, below expectations of 1.430 million, indicating that the weakness in the housing market could pose challenges to economic growth.
- Oil Prices Plummet: WTI crude oil prices dropped more than 5% to a 3.5-month low due to the U.S.-Iran agreement to reopen the Strait of Hormuz, enhancing expectations for a revival in oil supplies, which may affect the performance of energy stocks.
See More
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- Market Divergence: The S&P 500 Index fell by 0.18% and the Nasdaq 100 Index dropped by 0.83%, while the Dow Jones Industrial Average rose by 0.69% to a new all-time high, indicating a divergence in market performance, particularly as energy stocks are pressured by plunging crude oil prices.
- Weak Housing Data: US May housing starts fell by 15.4% month-over-month to a six-year low of 1.177 million, significantly below the expected 1.430 million, while building permits also declined slightly, reflecting weakness in the real estate market that could negatively impact overall economic growth.
- Oil Price Impact on Sentiment: WTI crude oil prices dropped over 3% to a 3.25-month low due to the US-Iran agreement to reopen the Strait of Hormuz, which has eased inflation expectations; while this provides short-term support for stocks, the long-term effects remain to be seen.
- Fed Meeting Focus: The market is turning its attention to the two-day FOMC meeting, where rates are expected to remain unchanged, but the press conference led by new Chair Kevin Warsh will be crucial, as investors will look for insights on future inflation outlook and policy direction.
See More
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- Oil Price Impact: WTI crude oil prices dropped over 3% to a 3.25-month low, easing inflation expectations and providing support for stocks and bonds, reflecting a cautious market outlook on future economic growth.
- Weak Housing Data: US May housing starts fell by 15.4% month-over-month to a six-year low of 1.177 million, below the expected 1.430 million, indicating potential challenges for economic recovery stemming from a sluggish real estate market.
- FOMC Meeting Focus: Market attention shifts to the two-day FOMC meeting, where rates are expected to remain unchanged, but the press conference led by new Chair Kevin Warsh will be pivotal in shaping future monetary policy directions.
See More
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- Crude Oil Price Plunge: WTI crude oil prices fell over 4% to a three-month low due to the US-Iran peace agreement and the reopening of the Strait of Hormuz, easing inflation expectations and boosting risk appetite in the equity markets.
- Weak Economic Data: The US June Empire Manufacturing Survey index dropped to 5.7, below the expected 13.7, indicating weakness in manufacturing that could pressure stocks, yet simultaneously supported gains in Treasury bonds.
- Tech Stocks Lead Gains: Chipmakers and AI infrastructure stocks performed strongly, with the iShares Semiconductor ETF rising over 5% and Western Digital up more than 15%, demonstrating strong market confidence in the technology sector.
See More
