Devon Energy (DVN) could see support from its upcoming combined company guidance with Coterra Energy (CTRA) in June, possible asset sales, merger synergies, stronger shareholder returns, and continued investment in Delaware Basin assets, RBC Capital Markets said.

Investors are waiting for the company's first full outlook after the merger, with new combined guidance expected in mid-June as Devon is currently reviewing all assets for cash flow, inventory depth, and capital efficiency, with Anadarko Basin and possibly Appalachia seen as potential sale candidates, the investment firm said in a Friday note.

RBC said any asset sale decision could come after the mid-June update, adding that each of those assets could be worth more than $4 billion based on recent deals.

Management appears confident in its $1 billion synergy target, with 156 active work streams and the target viewed as a floor rather than a ceiling, while Devon's higher fixed dividend of $0.32 a share and $8 billion stock buyback plan were better than expected and suggest confidence in the combined company.

RBC has a sector perform rating and a $59 price target.

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