Ovintiv, California Resources raised to Buy at Citi; Devon Energy tapped as top pick

[Prairie Pumpjack in Alberta Oil Industry]
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Ovintiv (OVV [https://seekingalpha.com/symbol/OVV]) and California Resources (CRC [https://seekingalpha.com/symbol/CRC]) are raised Wednesday to Buy from Neutral with respective $70 and $78 price targets at Citi, which says the companies are among the relative value plays in the E&P space, partly due to rapidly improving balance sheets.

Citi analyst Scott Gruber says Ovintiv's (OVV [https://seekingalpha.com/symbol/OVV]) acquisition of Montney peer Arc Resources should bring additional attention to the company's position in the play while also potentially promptingfunds flow that should offset the AECO pricing headwind.

Ovintiv's (OVV [https://seekingalpha.com/symbol/OVV]) well productivity in the Midland impressively continues to show improvement, which should de-risk the volume outlook going forward and potentially set the stage for a type-curve uplift into 2027, the analyst says, also noting the company aims to balance share repurchases with balance sheet improvement and is forecast to end 2027 with ~$2B of net debt.

California Resources (CRC [https://seekingalpha.com/symbol/CRC]) shares pulled back around earnings, which Gruber says presents an opportunity as the value of the core oil and gas business has improved materially for various reasons, including higher medium-term oil prices, a shift from decline management to a maintenance-plus strategy, and California's more constructive permitting environment.

Devon Energy (DVN [https://seekingalpha.com/symbol/DVN]) is Gruber's top pick among large-cap E&Ps, seeing a rejuvenated company following the close of the Coterra acquisition, offering an FCF/bbl above the peer average; while Devon may not garner the valuation of peers such as EOG Resources (EOG [https://seekingalpha.com/symbol/EOG]), the analyst thinks a ~10% yield at $70 WTI is "reasonable and potentially conservative."

MORE ON OVINTIV AND CALIFORNIA RESOURCES

* Ovintiv: Better Choices Are Elsewhere [https://seekingalpha.com/article/4905609-ovintiv-better-choices-are-elsewhere]
* Ovintiv: Shares Are Cheap At 5x EV/EBITDA And 13% FCF Yield [https://seekingalpha.com/article/4905336-ovintiv-shares-are-cheap-at-5x-evebitda-and-13-percent-fcf-yield]
* California Resources Q1 2026 Earnings Call Presentation [https://seekingalpha.com/article/4899538-california-resources-corporation-2026-q1-results-earnings-call-presentation]