Royal Bank of Canada Upgrades Ovintiv Stock to Outperform

The Royal Bank of Canada has upgraded its rating for Ovintiv Inc. (NYSE: OVV) from “sector perform” to “outperform” in a research note released on July 11, 2023. The bank has set a price target of $55.00 for the stock, reflecting confidence in the company’s potential in the energy sector.

Several other financial institutions have also revised their ratings and price targets for Ovintiv in recent weeks. Scotiabank increased its target from $48.00 to $51.00, maintaining a “sector outperform” rating. On the same day, Roth Capital initiated coverage with a “neutral” rating and set a price target of $42.00. Citigroup provided a “buy” rating with a target price of $54.00, while Mizuho adjusted its target from $58.00 to $50.00 and retained an “outperform” rating. Additionally, UBS Group raised its price objective from $51.00 to $52.00 with a “buy” rating.

Analyst sentiment toward Ovintiv is generally positive, with one analyst indicating a “Strong Buy” rating. Thirteen analysts have issued a “Buy” rating, while four have assigned a “Hold” rating, and one analyst has given a “Sell” rating. Data from MarketBeat.com indicates that Ovintiv currently holds a consensus rating of “Moderate Buy” with an average price target of $51.12.

Recent Financial Performance

Ovintiv recently released its earnings results for the second quarter, reporting $1.02 in earnings per share (EPS), slightly below the consensus estimate of $1.04. The company reported a total revenue of $1.79 billion, falling short of the expected $1.92 billion. The firm’s net margin stands at 6.46%, while its return on equity is noted at 14.24%. Analysts forecast an EPS of 5.59 for Ovintiv for the current year.

Institutional Investments in Ovintiv

Recent activity among institutional investors highlights growing interest in Ovintiv. IFP Advisors Inc. significantly increased its stake in the company by 316.7% in the second quarter, now holding 846 shares. Other firms such as Dogwood Wealth Management LLC and HM Payson & Co. have also acquired new positions in the company, with investments of $35,000 and $36,000, respectively. Harbour Investments Inc. and Gen Wealth Partners Inc. boosted their stakes by 143.8% and 91.8%, respectively, illustrating a broader trend of institutional investment in Ovintiv.

As of now, institutional and hedge fund ownership accounts for 83.81% of Ovintiv’s stock, indicating strong backing from major investors.

Ovintiv Inc. continues to be a significant player in the energy sector, focusing on the exploration and production of natural gas, oil, and natural gas liquids across the United States and Canada. The company operates through its USA and Canadian operations, with key assets in the Permian Basin in Texas, the Anadarko Basin in Oklahoma, and the Montney formation in Canada.