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Strength Seen in Ovintiv (OVV): Can Its 5.3% Jump Turn into More Strength?

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Ovintiv (OVV - Free Report) shares ended the last trading session 5.3% higher at $40.33. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 10.6% loss over the past four weeks.

Ovintiv has recently experienced a notable rise in its stock price, driven by speculation of a potential takeover by Coterra Energy. A StreetInsider report suggests that Ovintiv may have enlisted an investment bank to evaluate this opportunity. As both companies have not commented on the rumors, investors are eagerly watching to see if this momentum translates into ongoing strength for Ovintiv.

This energy company is expected to post quarterly earnings of $1.24 per share in its upcoming report, which represents a year-over-year change of -28.7%. Revenues are expected to be $2.53 billion, down 4.4% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Ovintiv, the consensus EPS estimate for the quarter has been revised 19% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on OVV going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Ovintiv belongs to the Zacks Oil and Gas - Exploration and Production - Canadian industry. Another stock from the same industry, Canadian Natural Resources (CNQ - Free Report) , closed the last trading session 4.7% higher at $34.78. Over the past month, CNQ has returned -8.3%.

Canadian Natural Resources' consensus EPS estimate for the upcoming report has changed -3.9% over the past month to $0.68. Compared to the company's year-ago EPS, this represents a change of -29.9%. Canadian Natural Resources currently boasts a Zacks Rank of #5 (Strong Sell).


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