Oppenheimer this morning lowered its price target for Devon Energy Corporation (DVN - 64.14) by $6 to $80. There could be additional target reductions ahead for DVN. The average 12-month price target -- as calculated by Thomson Reuters -- rests at $94.04, representing a sizeable 47.2% premium to yesterday's close of $63.94
What's more, 67% of the brokerage bunch considers DVN worthy of a "buy" or better rating. Zacks tallies 12 "strong buys" and two "buy" endorsements, compared to seven tepid "holds" and not a single "sell."
Meanwhile, it appears that relatively few traders are wagering on the stock to fall. Short interest for DVN decreased 9.2% over the most recent reporting period. These bearish bets now account for just 1.6% of the security's float, pointing to a rather scant supply of sideline cash.
Optimism is also prevalent among near-term speculators. The security's Schaeffer's put/call open interest ratio (SOIR) of 0.54 implies that calls nearly double puts among options slated to expire within three months. This ratio ranks six percentage points from an optimistic peak, indicating that near-term option traders have seldom been more positively aligned toward DVN over the past year.
Yet, it looks like option players are growing more bearish toward DVN. During the past two weeks, speculators on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 0.40 put for every call. This ratio ranks above 66% of all other readings taken during the past 12 months, signaling that traders on these exchanges have initiated bearish bets over bullish at an accelerated pace over the past couple of weeks.
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