Ovintiv (OVV) is expected to provide a positive Q3 update despite ongoing midstream constraints in the Montney region, with strong Permian well performance offsetting some of the production impact, UBS said in a note Monday.

The brokerage expects crude oil and condensate volumes near the low end of the company's guidance range due to the midstream plant outage and higher royalties. Stronger oil and natural gas realizations are expected to partially offset the volume impact, according to the note.

Ovintiv plans to release its Q3 financial results on Nov. 3.

UBS expects Ovintiv to increase share repurchases in Q4 to meet its target of returning more than 60% of fiscal 2026 free cash flow.

The brokerage also expects positive commentary on improving Canadian condensate market conditions and the tax environment following recent government initiatives.

UBS maintained its buy rating on the stock with $85 per share price target.

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