TSC Ratings' Updates: Devon Energy

TSC Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.

The following ratings changes were generated on Wednesday, July 1.

We've upgraded Devon Energy(DVN Quote) from sell to hold. Strengths include the company's solid financial position based on a variety of debt and liquidity measures that we have looked at. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Revenue fell by 31.8% since the same quarter a year ago but outperformed the industry average. Earnings per shared declined steeply in the most recent quarter compared with the year-ago period, but the consensus estimate suggests that Devon's two-year trend of declining EPS should reverse in the coming year. Net operating cash flow fell 53.6% to about $1.05 billion compared with the year-ago quarter, underperforming the industry average, and net income fell to about -$3.96 billion from $749 million, underperforming the S&P 500 and the industry average. ...