Analyst Lloyd Byrne from Jefferies maintained a Buy rating on Ovintiv (OVV – Research Report) and keeping the price target at $69.00.
Lloyd Byrne has given his Buy rating due to a combination of factors including Ovintiv’s strong performance in the first quarter of 2024, which surpassed analyst expectations in key financial metrics. The company’s cash flow per share (CFPS) and free cash flow per share (FCFPS) outperformed, supported by robust oil production and lower capital expenditures. Furthermore, Ovintiv’s guidance for fiscal year 2024 production was increased by 0.5% and its share buyback program exceeded projections, indicating a solid financial position and a commitment to returning value to shareholders.
The positive assessment was reinforced by Ovintiv’s adjusted EBITDA, which exceeded consensus and Jefferies’ estimates, driven by higher-than-expected production levels. The company’s operations in the Uinta oil region and Anadarko NGLs contributed to this outperformance, alongside better-than-expected natural gas realizations in Montney. Although there were some offsets due to lower NGL and condensate realizations and higher lease operating expenses, the overall lower capital expenditures in Q1 highlighted operational efficiency. Lloyd Byrne’s rating reflects confidence in Ovintiv’s strategic focus on the Permian trajectory, natural gas and NGL investments, and their ability to navigate post-quarter disputes positively.
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Ovintiv (OVV) Company Description:
Ovintiv, Inc. produces and develops multi-basin portfolio of oil, natural gas liquids and natural gas producing plays. The firm operates through the following segments: Canadian Operations, USA Operations and Market Optimization. The Canadian Operations segment includes the exploration for, development of, and production of oil, NGLs, natural gas and other related activities within Canada. The USA Operations segment includes the exploration for, development of, and production of oil, NGLs, natural gas and other related activities within the United States. The Market Optimization segment’s activities are managed by the Midstream, Marketing & Fundamentals team, which is primarily responsible for the sale of the Company’s proprietary production to third party customers. The company was founded in 1881 and is headquartered in Denver, CO.
