Ovintiv Inc. (OVV) Update - June 21

[dan_s]

Ovintiv Inc. (OVV, $46.85, Buy) - Meetings Highlight Shareholder Return Priority - Neal Dingmann at Truist Financial
Price Target is $72.00

Our recent Ovintiv meetings were​ largely well received by investors who anticipate stepped up shareholder returns through more stable than prior quarterly operations. We continue to believe OVV shares should outperform the group as cash payouts are stepped up, its investor base expands, and the hedging program shrinks.
We expect continued bolt-on acquisitions along with further organic delineation activity to bolster an already large inventory. We are reiterating our $72 PT and we anticipate little risk to further capital spending guidance outside of a material step up in commodity prices.
-------------------------
My current valuation of OVV is $90.00. 2022 Operating Cash Flow s/b $19 to $20 per share. This large-cap deserves a much higher valuation multiple than the 4.5X annualized CFPS that I am using. Guidance is for production to ramp up in 2H 2022 pushing FCF over $3 billion for the year. That should draw a lot more of the Wall Street Gang's attention.