Earnings Outlook: Devon, ConocoPhillips, and Chevron in 2025

Energy stocks are set for potential rebounds, particularly Devon Energy, ConocoPhillips, and Chevron. Investors eye these companies as possible standouts in 2025, following underwhelming performance in 2024.

Date: 07-01-2025

AI Rating: 7

Underwhelming Performance in 2024
Energy stocks, like the Energy Select Sector SPDR Fund, had a poor showing in 2024, with a mere 2% return compared to the broader market's 23% return. The stagnation in oil prices contributed significantly to this struggle.

Future Prospects for Devon Energy
Devon Energy appears to be positioned for possible gains in 2025. The company's balance sheet is solid, and it holds a low break-even point of around $40 per barrel of oil. Moreover, Devon's U.S.-focused portfolio is well-placed for potential price recoveries, and the recent acquisition of production assets implies room for growth.

Acquisition Impacts for ConocoPhillips
ConocoPhillips's recent acquisition of Marathon Oil is expected to enhance its operational capabilities significantly. The company anticipates immediate earnings and cash flow boosts from this purchase, alongside substantial cost synergies of over $1 billion in its first year. This acquisition positions ConocoPhillips favorably among its peers as it gears up for 2025.

Chevron's Growth Strategy
Chevron is also on a growth trajectory with substantial investments planned and a fruitful acquisition of Hess. The expected 3% compound annual growth rate in production, alongside projected growth in free cash flow of more than 10%, indicates a positive outlook. Additionally, Chevron's history of dividend increases makes it an attractive option in the energy sector.

Stocks: DVN COP CVX