- Gennaio 31, 2023
- Posted by: Oliver
- Categoria: Economics, Finance & accounting
Next up is an energy stock, Ovintiv.
This company operates in the oil and gas exploration and production sphere, where it has principal assets in the Permian and Anadarko basins of Texas and Oklahoma, major oil and gas plays in some of North America’s richest hydrocarbon regions, and in the Montney formation of the Alberta-British Columbia border area.
In addition, the company has smaller assets in the Bakken and Uinta plays of Montana and Utah. Ovintiv focuses its operations on generating high-return liquids production, both oil and gas, and producing solid free cash flow to provide a return to shareholders.
Ovintiv will release its 2022 full year results at the end of February, but in the last quarterly report, 3Q22, the company raised its 2022 production guidance to the range of 505 MBOE/d to 515 MBOE/d, an increase of 5,000 barrels per day. Production in Q3 came in at 516 MBOE/d, at the high end of the quarterly guidance.
On the financial side, Ovintiv saw Q3 net earnings of $1.19 billion, up from a $72 million net loss in 3Q21. The company had a non-GAAP free cash flow of $437 million, and returned $387 million to shareholders through a combination of buybacks and dividend payments.
Turning to the Smart Score, we find that Ovintiv has benefited from strongly bullish sentiment from the financial bloggers, along with a 71% return on equity over the trailing 12-month period.
But a major boost came from the hedge funds which last quarter increased their holdings of OVV by 4.2 million shares. These positives outweigh other factors that showed negative results; a Perfect 10 Smart Score does not require every factor to register strongly positive.
in his assessment of Ovintiv, Mizuho’s 5-star analyst Nitin Kumar lays to rest some investor concerns. He writes, “Although the company began its cash return program earlier than expected in 2022, missed earnings and raised capital guidance have led many investors to question inventory depth, strategic commitment and execution track-record.
We believe the company is better positioned to maintain FCF generation despite backwardated commodity prices in 2023 than peers, which coupled with an increase in cash returns could provide tailwinds to the stock.”
Along with a Buy rating, Kumar puts a $68 price target on the stock, suggesting an upside of 32% for the next 12 months.
This oil and gas player has picked up 11 recent analyst reviews, with a breakdown of 9 Buys and 2 Holds for a Strong Buy consensus rating. The stock is selling for $51.32, and its average price target of $65 implies a 27% one-year gain.