Raymond James has lowered its price target for Devon Energy, one of the largest independent oil and gas producers in the United States, from $63 to $56 per share. The revision, announced on Wednesday, comes as crude oil prices have softened in recent weeks, driven by mounting concerns over slowing global economic growth and weaker-than-expected demand from key markets such as China.
The investment bank maintained its 'outperform' rating on the stock, indicating that while the near-term outlook has dimmed, the firm still sees long-term value. However, the reduced target reflects a more cautious stance on the energy sector, which has been under pressure since the start of the second quarter. Brent crude, the international benchmark, has fallen by roughly 8% since early June, trading around $81 per barrel on Wednesday.
For UK investors, the development is a reminder of the interconnected nature of global energy markets. Many British pension funds and investment portfolios hold exposure to US energy majors through exchange-traded funds or diversified equity funds. A sustained period of weaker oil prices could weigh on the earnings of companies across the sector, potentially dragging on portfolio returns.
Analysts at Raymond James cited lower oil price assumptions and reduced production estimates as key factors behind the target cut. 'We see a more challenging pricing environment for the remainder of 2026,' the analysts wrote in a note to clients. 'While Devon's operational efficiency remains strong, the macro headwinds are difficult to ignore.' The broader energy sector on Wall Street has also struggled, with the S&P 500 energy index down nearly 5% over the past month.
In the UK, the FTSE 100 has been relatively resilient, but energy-heavy indices such as the FTSE 250 could face headwinds if oil prices continue to slide. BP and Shell, two of the largest constituents of the FTSE 100, have seen their shares dip by around 3% and 2% respectively over the past fortnight. Investors are now watching for signals from OPEC+ and upcoming US inventory data for further direction on oil prices.