03:19 PM EDT, 07/09/2024 (MT Newswires) -- Ovintiv's ( OVV ) improving operational performance is expected to result in higher crude/condensate production volumes and increased free cash flow in H2 2024, UBS said in a note sent Tuesday.

The company's Permian TILs, or Tariff Information Label, are expected to ramp up in Q2 to Q4, compared with Q1, the investment firm said, reiterating its "top pick" view on Ovintiv ( OVV ) heading into the company's Q2 results.

"While not to the same extent as 2023, we see upside to [Ovintiv's ( OVV )] 205-209 mbpd crude/condensate guide as Permian TILs ramp," UBS said, adding that it expects improved balance sheets in Q2 to Q4 that will further support valuation rerating.

The firm said it expects Q2 cash flow per share of $3.76, below analysts' forecast of $3.80, on total volumes of 569 mboepd, down 1% sequentially, but slightly above the midpoint of the 560 to 575 mboepd guide.

UBS has a buy rating on the stock with a $66 price target.

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