Royal Bank of Canada Upgrades Ovintiv to Outperform Rating

Shares of Ovintiv (NYSE: OVV) received a significant boost following an upgrade by the Royal Bank of Canada (RBC), which elevated the company’s rating from “sector perform” to “outperform.” This announcement was made in a research note distributed to investors on Wednesday morning, with RBC setting a price target of $55.00 for the stock.

Analyst Activity and Ratings

Ovintiv’s performance has attracted attention from several financial institutions recently. Scotiabank raised its target price from $48.00 to $51.00, assigning a “sector outperform” rating in a report released on July 11, 2023. Roth Capital also initiated coverage of Ovintiv, issuing a “neutral” rating with a target price set at $42.00.

Additionally, Citigroup placed a target price of $54.00 on Ovintiv shares, recommending a “buy” rating in a report dated July 2, 2023. Meanwhile, Mizuho revised its price objective from $58.00 to $50.00, maintaining an “outperform” rating as of September 15, 2023. UBS Group also increased its price target to $52.00 and rated the stock as a “buy” on August 20, 2023.

Overall, the consensus rating for Ovintiv is “Moderate Buy,” with MarketBeat reporting an average price target of $51.12. A total of one analyst has assigned a “Strong Buy” rating, thirteen have given a “Buy” rating, four have issued a “Hold” rating, and one has recommended a “Sell” rating.

Recent Earnings and Dividend Announcements

On July 24, 2023, Ovintiv reported its quarterly earnings, revealing earnings per share (EPS) of $1.02, which fell short of the consensus estimate of $1.04 by $0.02. The company’s revenue for the quarter was $1.79 billion, while analysts had anticipated $1.92 billion. Ovintiv’s net margin was recorded at 6.46%, alongside a return on equity of 14.24%. Analysts predict Ovintiv will post an EPS of $5.59 for the current year.

In terms of shareholder returns, Ovintiv announced a quarterly dividend of $0.30, which was paid on September 29, 2023. This dividend represents an annualized amount of $1.20 and yields approximately 3.3%. The company’s current dividend payout ratio stands at 53.10%.

Institutional Investments in Ovintiv

Recent activity from institutional investors highlights a growing interest in Ovintiv. IFP Advisors Inc. increased its stake by 316.7% during the second quarter, now holding 846 shares valued at approximately $32,000 after acquiring an additional 643 shares. Dogwood Wealth Management LLC and HM Payson & Co. also entered new positions in the company, with investments worth $35,000 and $36,000, respectively.

Harbour Investments Inc. raised its stake by 143.8% in the first quarter, now owning 919 shares valued at around $39,000. Meanwhile, Gen Wealth Partners Inc. increased its holdings by 91.8%, owning 1,011 shares worth approximately $43,000. Overall, institutional investors and hedge funds control approximately 83.81% of Ovintiv’s stock.

Ovintiv Inc., based in the United States and Canada, engages in the exploration, development, production, and marketing of natural gas, oil, and natural gas liquids. The company’s operations are divided into segments, including USA Operations, Canadian Operations, and Market Optimization, with significant assets located in the Permian Basin of Texas, the Anadarko Basin of Oklahoma, and the Montney region of British Columbia and Alberta.