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Ovintiv Could Be on Track for Upward Revaluation Based on Strong Performance, RBC Says

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The depth of North American oil and gas producer Ovintiv's (OVV) position Montney basin in Canada, its streamlined portfolio, robust balance sheet and strong shareholder returns can lead to a favorable re-valuation, RBC Capital Markets said in a research note on Monday.

Ovintiv has little apparent appetite to add debt to its balance sheet, or to dedicate itself to large mergers and acquisitions, following the transformation of its portfolio. The company appears content with its acreage in Montney and the Permian basin.

On the other hand, it looks poised to execute its "ground game" through small acquisitions in both basins here and there, RBC said.

The company has also streamlined the structure of its overheads and is working on lowering transportation, processing and operating costs.

Its potential inclusion in the S&P/TSX index has been a recurrent question for the company and if realized, it could open up the stock to a broader bid in Canada, RBC believes.

Ovintiv is adhering to a 2026 mid-point capital spending plan of $2.3 billion or a production outlook of 620,000 to 645,000 boed, which includes 205,000-212,000 bbl/d of oil and condensate.

RBC acknowledged the company's efforts to refine operations through the use of proprietary data, machine learning and stacked innovation.

RBC reaffirmed its outperform rating on Ovintiv and its one-year price target of $70 per share.

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Commodities

US DOE Awards 500,000 Barrel SPR Crude Exchange to Vitol

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Commodities

US Natural Gas Update: Futures Edge Up on Hotter Early July Forecasts

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