Increasing Our Fair Value Estimate for Ovintiv

With oil prices surging, we are increasing our medium-term production forecast for no-moat Ovintiv. We also incorporated our increased outlook for near-term commodity prices into our model, and as a result, we are increasing our fair value estimate to $22 (CAD 28) from $16 (CAD 20). Despite the bump in fair value, we see the stock as fairly valued. However, we are lowering our uncertainty rating to very high from extreme, as now expect less variation across our bull and bear scenarios due to more stable commodity prices.