Ovintiv (OVV) Stock Jumps 5.9%: Will It Continue to Soar?

Ovintiv (OVV) shares ended the last trading session 5.9% higher at $45.43. 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 20.2% loss over the past four weeks.

Ovintiv ended sharply higher on Friday, driven by high crude prices spurred by curbs on Russia, plus a demand spike owing to the reopening of economies and a rebound in activity. The steady increase in commodity prices to over $100 a barrel has pushed drilling activity higher and contributed to the strength in Ovintiv, whose productive capacity comes from diverse assets located in the United States and Canada.

This energy company is expected to post quarterly earnings of $2.75 per share in its upcoming report, which represents a year-over-year change of +147.8%. Revenues are expected to be $2.66 billion, up 57.1% 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 2.4% 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 is a member of the Zacks Oil and Gas - Exploration and Production - Canadian industry. One other stock in the same industry, Canadian Natural Resources (CNQ), finished the last trading session 1.5% higher at $50.52. CNQ has returned -24.3% over the past month.

Canadian Natural Resources' consensus EPS estimate for the upcoming report has changed +0.8% over the past month to $2.23. Compared to the company's year-ago EPS, this represents a change of +120.8%. Canadian Natural Resources currently boasts a Zacks Rank of #3 (Hold).

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