As of July 16, 2025, Ovintiv Inc has a Discounted Cash Flow (DCF) derived fair value of $61.15 per share. With the current market price at $40.48, this represents a potential upside of 51.1%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $62.86 |
| DCF Fair Value (10-year) | $61.15 |
| Potential Upside (5-year) | 55.3% |
| Potential Upside (10-year) | 51.1% |
| Discount Rate (WACC) | 6.9% - 8.9% |
Revenue is projected to grow from $9152 million in 12-2024 to $10775 million by 12-2034, representing a compound annual growth rate of approximately 1.6%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 9152 | 16% |
| 12-2025 | 8511 | -7% |
| 12-2026 | 8430 | -1% |
| 12-2027 | 8450 | 0% |
| 12-2028 | 8619 | 2% |
| 12-2029 | 8954 | 4% |
| 12-2030 | 9133 | 2% |
| 12-2031 | 9638 | 6% |
| 12-2032 | 9831 | 2% |
| 12-2033 | 10327 | 5% |
| 12-2034 | 10775 | 4% |
Net profit margin is expected to improve from 12% in 12-2024 to 13% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 1125 | 12% |
| 12-2025 | 1077 | 13% |
| 12-2026 | 1067 | 13% |
| 12-2027 | 1069 | 13% |
| 12-2028 | 1091 | 13% |
| 12-2029 | 1133 | 13% |
| 12-2030 | 1156 | 13% |
| 12-2031 | 1219 | 13% |
| 12-2032 | 1244 | 13% |
| 12-2033 | 1307 | 13% |
| 12-2034 | 1363 | 13% |
with a 5-year average of $2027 million. Projected CapEx is expected to maintain at approximately 22% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 2058 |
| 12-2026 | 2129 |
| 12-2027 | 2138 |
| 12-2028 | 1972 |
| 12-2029 | 1910 |
| 12-2030 | 1938 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 44 |
| Days Inventory | 0 |
| Days Payables | 48 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 2755 | 135 | 1419 | 29 | 1172 |
| 2026 | 3729 | 178 | 1874 | (43) | 1720 |
| 2027 | 3742 | 178 | 1878 | (2) | 1688 |
| 2028 | 3608 | 182 | 1916 | 28 | 1483 |
| 2029 | 3609 | 189 | 1990 | 17 | 1413 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 62.86 | 55.3% |
| 10-Year DCF (Growth) | 61.15 | 51.1% |
| 5-Year DCF (EBITDA) | 39.06 | -3.5% |
| 10-Year DCF (EBITDA) | 47.23 | 16.7% |
Is Ovintiv Inc (OVV) a buy or a sell? Ovintiv Inc is definitely a buy. Based on our DCF analysis, Ovintiv Inc (OVV) appears to be significantly undervalued with upside potential of 51.1%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $40.48.