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Seaport Names Devon Energy and Permian Resources as Top Upstream Oil Stocks
Seaport has designated Devon Energy (NYSE:DVN) and Permian Resources (NYSE:PR) as its top investment picks among oil-weighted upstream energy producers in a new analyst note. Analyst Vin Lovaglio assigned "Buy" ratings and "Top Pick" status to both companies, highlighting their strategic positioning and distinct pathways to enhancing shareholder value through operational improvements and acquisitions.
The Case for Devon Energy
Seaport views Devon Energy as a standout opportunity, primarily due to its combination with Coterra Energy's assets. Lovaglio's analysis states the quality and scale of the combined Devon-Coterra Delaware Basin position is now "unmatched in the sector."
The firm believes consensus estimates likely do not fully reflect the impact of future synergies as the company streamlines its expanded portfolio. According to the note, Devon trades at approximately a 5% discount on 2027 unlevered free cash yield compared to peers with similar production scale. Seaport sees a clear catalyst trajectory through non-core divestitures that could bridge this valuation gap.
AdPermian Resources' Strategic Advantage
Permian Resources was highlighted for its "repeatable competitive advantage" in executing ground-game acquisitions and successfully integrating new assets. This strategy has been a key driver of inventory expansion and improved oil capital efficiency, according to the analyst.
Lovaglio noted that the company's relatively even distribution of development across its Delaware footprint increases confidence in the sustainability of its returns. With the stock trading in line with the small and mid-cap average, Seaport views its current valuation as a potential "floor," suggesting limited downside risk and continued capacity for small-scale, low-cost M&A.
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