Ovintiv Inc. (OVV) PT Raised to $64 at Citi

Citi analyst Brian Downey raised the price target on Ovintiv Inc. (NYSE: OVV) to $64.00 (from $58.00) while maintaining a Buy rating.

The analyst comments "We mark our model to market for 1Q commodity prices, realizations, hedges, and Citi’s most recent price deck. We trim 1Q production to ~568mboe/d based on a slightly lighter TIL schedule and sit in-line with consensus. We estimate 1Q CFPS of $3.68, also in-line with consensus. TILs should pick up in 2Q, but pick up further in 3Q; thus we see risk to 2Q volumes (we’re ~7mboe/d below consensus on total volumes). We’re also ~$50mm higher on 2Q capital at ~$620mm, as OVV will bring on a 6th Permian rig. Thus, we think investor expectations for 2Q FCF need to be tempered down. A 2H-weighted TIL cadence should support production in the back half of 2024. 2024 production guidance already accounts for the impact of Permian design changes/enhanced well performance, so the FY production guide of ~205mbo/d of oil/condensate has been maintained, as has FY capital guidance (~$2.3b)."

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