TSE:CVE
Cenovus Energy (CVE.TO)
Financials 
Technical Analysis 
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Premium contentCVE is one of Canada's largest integrated energy companies. Its stock price has been hampered lately due to delays in re-starting its two US refineries. However, the company is generating great cash flow allowing for an aggressively retirement of debt and share buyback. It trades at 8x earnings, under 2x book and supports a 25% ROE. We recommend placing a stop-loss at $20, looking to achieve $31 -- upside potential of 29%. Yield 1.9%
(Analysts’ price target is $31.43)
Recent CEO retirement not a concern.
Is a top pick and is buying more shares.
Recent selloff unclear as to the reason.
30+ years of reserves.
$70 oil equates to 3.4x cash flow per share.
Pledged to return 100% of free cash flow later this year.
Expecting a $38 share price this year.
Eric NuttallPremium contentOur PAST TOP PICK with CVE has triggered its stop at $23. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 9%, when combined with our previous buy recommendation.
Premium contentWe reiterate this Canadian major energy producer as a TOP PICK. The company announced it will buy out its partner’s share of the 160 mbd refinery in Ohio, with a capacity to consume 90 mbd of heavy production. We like it has aggressively been retiring debt and buying back shares, while still growing cash reserves. It trades at under 2x book. Recently reported earnings support a ROE of 25%. We continue to recommend a stop at $23, looking to achieve $33 -- upside potential of 28%. Yield 2.4%
(Analysts’ price target is $32.97)
It has good holdings. The energy sector is in the beginning of a long up-cycle. These cycles have periods of three month relative lows so aim to buy in one of these periods.
David BurrowsPledged 100% of cash flow return to shareholders.
Confidence in new CEO.
Laser focused on reducing debt.
30 year reserve life index.
Expecting meaningful share growth.
6x multiple on share price not out of question.
Good company for long term shareholders.
Eric NuttallCVE’s recent quarter result was solid given the tailwind of high oil prices, and shares are now trading at 7.5x times' Forward P/E.
In the 4Q, CVE’s revenue grew 2% to $14B, missing estimates of $14.4B and EPS was $0.29 also missing the estimate of $0.61.
The balance sheet is strong, with long-term debt (excluding leases) of $8.7B, significantly reduced compared to $12B last year.
Total debt is around 1.2x times trailing twelve-month free funds flow (FFF) of $7.3B, and free cash flow grew nicely around 55% compared to $4.7B last year.
Based on consensus estimates, sales are expected to decline by 12%, while EPS is expected to decline by 5% in 2023.
CVE also announced a CEO transition, as the COO will now be in charge, and the old CEO would be the executive chair, we don’t think this would change the company’s fundamentals much in the near term.
The company has been actively repurchasing shares over the last two years and raising dividends as a result of operational tailwinds from high oil prices.
However, going forward the company’s performance will largely depend on oil prices.
It is priced well and has good potential, depending on what commodity prices do.
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Missed on Q1 cashflow and production, disappointing. Q4 missed also. Indigestion of fully integrating Husky. Looking for improvement in deliverability and consistency. Looking for a good entry point as it waits out in the penalty box.