In a report published Friday, Macquarie analyst Paul Grigel upgraded the rating on Devon Energy Corp (NYSE: DVN) from Neutral to Outperform, following the recent decline in the company's share price. The price target is estimated at $72.

"The increased discount to DVN's peer group beyond the year ago average reflects a mismatch, in our view, between the risk of future cash flow and growth upside," analyst Paul Grigel wrote.

Grigel believes that continued improvements in Devon Energy's Eagle Ford operations "could further shorten the cash flow pay-back period for diversification into additional potentially high returning domestic projects."

In the report Macquarie noted, "As confidence is gained in the Anadarko Basin potential, additional discretion on the reallocation of appraisal dollars estimated at ~US$600m per year would supplement growth from the Delaware Basin, which has experienced improvements over the past year."

Grigel added that the company's Canadian Oil Sands development projects could provide "scalability and a source for leverage to an oil price rally."

The EPS and CFPS estimates for 2015 have been raised from $1.28 to $1.42 and from $11.88 to $12.03, respectively. The EPS estimate for 2016 has been reduced from ($0.24) to ($0.26).

Latest Ratings for DVN

View More Analyst Ratings for DVN
View the Latest Analyst Ratings

See more from Benzinga

• Netflix Margins Will Beat Long-Term Consensus On 'Global' Licensing Expansion, Nomura Proclaims

• Chardan Upgrades Himax To Buy, Target On Coming Microsoft Hololens

• Vertex Pharma Is 'Hyped,' H.C. Wainwright Sees 35% Downside

© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.