Ovintiv Inc.'s (NYSE:OVV) Price Is Right But Growth Is Lacking

Simply Wall St.04-05

With a price-to-earnings (or "P/E") ratio of 7x Ovintiv Inc. (NYSE:OVV) may be sending very bullish signals at the moment, given that almost half of all companies in the United States have P/E ratios ...

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(NYSE:OVV) may be sending very bullish signals at the moment, given that almost half of all companies in the United States have P/E ratios ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/energy/nyse-ovv/ovintiv/news/ovintiv-incs-nyseovv-price-is-right-but-growth-is-lacking\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Ovintiv Inc.'s (NYSE:OVV) Price Is Right But Growth Is Lacking</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nOvintiv Inc.'s (NYSE:OVV) Price Is Right But Growth Is Lacking\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-05 20:46 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/us/energy/nyse-ovv/ovintiv/news/ovintiv-incs-nyseovv-price-is-right-but-growth-is-lacking><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>With a price-to-earnings (or \"P/E\") ratio of 7x Ovintiv Inc. (NYSE:OVV) may be sending very bullish signals at the moment, given that almost half of all companies in the United States have P/E ratios ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/energy/nyse-ovv/ovintiv/news/ovintiv-incs-nyseovv-price-is-right-but-growth-is-lacking\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"NYSE","symbol_name":"纽交所","start_time":0,"source_url":"https://simplywall.st/stocks/us/energy/nyse-ovv/ovintiv/news/ovintiv-incs-nyseovv-price-is-right-but-growth-is-lacking","article_id":"2425561014","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/1032000-choice1-main-header/1585186548616"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2425561014","pubTimestamp":1712321204,"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"With a price-to-earnings (or \"P/E\") ratio of 7x Ovintiv Inc. ( NYSE:OVV ) may be sending very bullish signals at the...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"NYSE":"纽交所","BK4213":"石油与天然气的勘探与生产","OVV":"Ovintiv Inc."},"translate_title":"Ovintiv Inc。（纽约证券交易所代码：OVV）的价格是正确的，但增长不足","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"NYSE":1,"OVV":1},"content_text":"With a price-to-earnings (or \"P/E\") ratio of 7x Ovintiv Inc. (NYSE:OVV) may be sending very bullish signals at the moment, given that almost half of all companies in the United States have P/E ratios greater than 18x and even P/E's higher than 33x are not unusual.  However, the P/E might be quite low for a reason and it requires further investigation to determine if it's justified.     Ovintiv has been struggling lately as its earnings have declined faster than most other companies.   The P/E is probably low because investors think this poor earnings performance isn't going to improve at all.  If you still like the company, you'd want its earnings trajectory to turn around before making any decisions.  If not, then existing shareholders will probably struggle to get excited about the future direction of the share price.      See our latest analysis for Ovintiv NYSE:OVV Price to Earnings Ratio vs Industry April 5th 2024 If you'd like to see what analysts are forecasting going forward, you should check out our free report on Ovintiv.  How Is Ovintiv's Growth Trending?   The only time you'd be truly comfortable seeing a P/E as depressed as Ovintiv's is when the company's growth is on track to lag the market decidedly.   Taking a look back first, the company's earnings per share growth last year wasn't something to get excited about as it posted a disappointing decline of 44%.   Unfortunately, that's brought it right back to where it started three years ago with EPS growth being virtually non-existent overall during that time.  So it appears to us that the company has had a mixed result in terms of growing earnings over that time.     Turning to the outlook, the next three years should generate growth of 0.9%  per annum as estimated by the seven analysts watching the company.  With the market predicted to deliver 10% growth  each year, the company is positioned for a weaker earnings result.  With this information, we can see why Ovintiv is trading at a P/E lower than the market.  It seems most investors are expecting to see limited future growth and are only willing to pay a reduced amount for the stock.    The Key Takeaway  We'd say the price-to-earnings ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.  We've established that Ovintiv maintains its low P/E on the weakness of its forecast growth being lower than the wider market, as expected.  Right now shareholders are accepting the low P/E as they concede future earnings probably won't provide any pleasant surprises.  Unless these conditions improve, they will continue to form a barrier for the share price around these levels.      It's always necessary to consider the ever-present spectre of investment risk. We've identified 5 warning signs with Ovintiv (at least 1 which is a bit concerning), and understanding these should be part of your investment process.   Of course, you might find a fantastic investment by looking at a few good candidates. So take a peek at this free list of companies with a strong growth track record, trading on a low P/E.  Valuation is complex, but we're helping make it simple.Find out whether Ovintiv is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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. 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