Yahoo Finance Here's What Analysts Are Forecasting For Ovintiv Inc. (NYSE:OVV) Following Its Earnings Miss
The analysts might have been a bit too bullish on Ovintiv Inc. (NYSE:OVV), given that the company fell short of expectations when it released its quarterly results last week. Results look to have been somewhat negative - revenue fell 5.5% short of analyst estimates at US$2.3b, and statutory earnings of US$1.27 per share missed forecasts by 5.1%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for Ovintiv
After the latest results, the consensus from Ovintiv's eleven analysts is for revenues of US$9.53b in 2024, which would reflect a perceptible 7.4% decline in revenue compared to the last year of performance. Statutory earnings per share are expected to fall 12% to US$6.45 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$9.87b and earnings per share (EPS) of US$6.35 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
The average price target was steady at US$62.23even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Ovintiv analyst has a price target of US$69.00 per share, while the most pessimistic values it at US$52.00. This is a very narrow spread of estimates, implying either that Ovintiv is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that revenue is expected to reverse, with a forecast 14% annualised decline to the end of 2024. That is a notable change from historical growth of 15% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 2.4% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Ovintiv is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. With that said, earnings are more important to the long-term value of the business. The consensus price target held steady at US$62.23, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Ovintiv analysts - going out to 2026, and you can see them free on our platform here.
Even so, be aware that Ovintiv is showing 4 warning signs in our investment analysis , you should know about...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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