Ovintiv Inc. (OVV) Update - Oct 13

[dan_s]

Ovintiv is the 7th largest company in the Sweet 16 with a market-cap of approximately $10 Billion and 5th largest based on daily production volumes.
The Company's current production is ~540,000 BOE per day (36% crude oil and condensate, 16% NGLs and 48% natural gas).
2021: It is on pace to generate approximately $3.3 Billion of operating cash flow and $1.8 Billion of free cash flow from operations.
2022: Based on my assumption that Ovintiv will increase D&C spending by ~10% in 2022, production should increase to 557,000 Boepd with mix about the same and generate $3.9 Billion of operating cash flow and $2.2 Billion of free cash flow from operations. Earnings per share should be up at least 50% YOY.

TipRanks: "Truist Financial analyst Neal Dingmann raised the firm's price target on Ovintiv to $50 from $44 and keeps a Buy rating on the shares as part of a broader research on Exploration and Production names in the Energy sector. The analyst is increasing his oil price deck estimates by over 6% for Q4 of 2021 to 2023 period and natural gas prices by over 34%. Dingmann adds that consensus estimates continue to trend below rising spot and forward prices, creating an environment whereby free cash flows should for the most part be able to surprise to the upside."

TipRanks: "In the last 3 months, 16 ranked analysts set 12-month price targets for OVV. The average price target among the analysts is $40.98. With a price target range of $27 to $54." < Keep in mind as you read the note from Zacks below, that all 14 of the Wall Street Gang price targets for OVV dated before October are definitely based on much lower oil, gas and NGL prices than we have today.

OVV is currently trading for $38/share, which compares to my valuation of $60/share.

Read more at:
https://thefly.com/n.php?id=3383244

Note published this morning by Zacks Equity Research

The Zacks Rank is known for transforming investment portfolios. In fact, a portfolio of Zacks Rank #1 (Strong Buy) stocks has beaten the market in 26 of the last 32 years, with an average annual return of +25.41%.

Moreover, stocks with a new #1 (Strong Buy) ranking have some of the biggest profit potential, while those that fell to a #4 (Sell) or #5 (Strong Sell) have some of the worst.

Let's take a look at Ovintiv (OVV), which was added to the Zacks Rank #1 list on October 12, 2021.

Ovintiv Inc. is an independent energy producer, which explores and churns out oil and natural gas from diverse assets located in the United States and Canada. Previously known as Encana, the company rebranded and shifted its corporate domicile from Calgary, Canada to Denver, U.S.

Three analysts revised their earnings estimate upwards in the last 60 days for fiscal 2021. The Zacks Consensus Estimate has increased $1.63 to $6.10 per share. OVV boasts an average earnings surprise of 24.3%.

Earnings are expected to grow 1642.9% for the current fiscal year, while revenue is projected to increase 23.5%.

Even more impressive, OVV has gained in value over the past four weeks, up 32.6% compared to the S&P 500's loss of 2.4%.

Bottom Line

With a #1 (Strong Buy) ranking, positive trend in earnings estimate revisions, and strong market momentum, Ovintiv should be on investors' shortlist.