Discounted Cash Flow (DCF) Analysis Unlevered

Devon Energy Corporation (DVN)

$50.61

+0.76 (+1.52%)

All numbers are in Millions, Currency in USD

Stock DCF: -122.93 | 50.61 | overvalue

Operating Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	10,734	6,220	4,828	12,206	19,169	26,138.36	35,641.61	48,600.01	66,269.74	90,363.75
Revenue (%)
EBITDA	3,518	-125	-1,668	5,424	9,976	4,845.83	6,607.65	9,010.03	12,285.85	16,752.67
EBITDA (%)
EBIT	3,518	-125	-2,968	2,137.38	4,814.50	-2,192.25	-2,989.30	-4,076.14	-5,558.12	-7,578.91
EBIT (%)
Depreciation	-	-	1,300	3,286.62	5,161.50	7,038.09	9,596.96	13,086.17	17,843.97	24,331.58
Depreciation (%)

Balance Sheet Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Total Cash	2,414	1,464	2,237	2,111	1,454	6,128.93	8,357.25	11,395.74	15,538.94	21,188.51
Total Cash (%)
Account Receivables	885	832	775	1,626	1,767	3,147.72	4,292.15	5,852.66	7,980.54	10,882.06
Account Receivables (%)
Inventories	-	-	-	-	201	274.08	373.73	509.60	694.88	947.53
Inventories (%)
Accounts Payable	662	428	242	500	859	1,392.56	1,898.87	2,589.24	3,530.63	4,814.28
Accounts Payable (%)
Capital Expenditure	-2,506	-1,941	-1,161	-2,007	-2,542	-5,661.73	-7,720.20	-10,527.06	-14,354.44	-19,573.35
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 50.61
Beta	2.362
Diluted Shares Outstanding	679
Cost of Debt
Tax Rate	22.64
After-tax Cost of Debt	3.87%
Risk-Free Rate
Market Risk Premium
Cost of Equity	14.643
Total Debt	6,697
Total Equity	34,364.19
Total Capital	41,061.19
Debt Weighting	16.31
Equity Weighting	83.69
Wacc

Build Up Free Cash

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	10,734	6,220	4,828	12,206	19,169	26,138.36	35,641.61	48,600.01	66,269.74	90,363.75
EBITDA	3,518	-125	-1,668	5,424	9,976	4,845.83	6,607.65	9,010.03	12,285.85	16,752.67
EBIT	3,518	-125	-2,968	2,137.38	4,814.50	-2,192.25	-2,989.30	-4,076.14	-5,558.12	-7,578.91
Tax Rate	-233.04%	-225.69%	13.27%	2.93%	22.64%	-83.98%	-83.98%	-83.98%	-83.98%	-83.98%
EBIAT	11,716.47	-407.11	-2,574.19	2,074.69	3,724.66	-4,033.28	-5,499.68	-7,499.22	-10,225.75	-13,943.57
Depreciation	-	-	1,300	3,286.62	5,161.50	7,038.09	9,596.96	13,086.17	17,843.97	24,331.58
Accounts Receivable	-	53	57	-851	-141	-1,380.72	-1,144.43	-1,560.52	-2,127.88	-2,901.52
Inventories	-	-	-	-	-	-73.08	-99.65	-135.88	-185.28	-252.64
Accounts Payable	-	-234	-186	258	359	533.56	506.30	690.38	941.38	1,283.65
Capital Expenditure	-2,506	-1,941	-1,161	-2,007	-2,542	-5,661.73	-7,720.20	-10,527.06	-14,354.44	-19,573.35
UFCF	9,210.47	-2,529.11	-2,564.19	2,761.31	6,562.16	-3,577.16	-4,360.69	-5,946.13	-8,108	-11,055.86
WACC
PV UFCF						-3,168.71	-3,421.72	-4,133.03	-4,992.20	-6,029.97
SUM PV UFCF										-21,745.62

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	12.89
Free cash flow (t + 1)	-11,276.97
Terminal Value	-103,553.49
Present Value of Terminal Value	-56,479.05

Intrinsic Value

Enterprise Value	-78,224.67
Net Debt	5,243
Equity Value	-83,467.67
Shares Outstanding	679
Equity Value Per Share	-122.93