Analyst Travis Wood from National Bank has revised the price target for Cenovus Energy (CVE, Financial), reducing it from C$25 to C$23. Despite this adjustment, Wood maintains a Sector Perform rating on the stock.
This change reflects a reassessment of CVE's valuation, though specifics on the factors influencing this decision were not disclosed. The stock's performance continues to be monitored as investors react to the updated target.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 9 analysts, the average target price for Cenovus Energy Inc (CVE, Financial) is $19.11 with a high estimate of $23.08 and a low estimate of $16.23. The average target implies an upside of 57.17% from the current price of $12.16. More detailed estimate data can be found on the Cenovus Energy Inc (CVE) Forecast page.
Based on the consensus recommendation from 10 brokerage firms, Cenovus Energy Inc's (CVE, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Cenovus Energy Inc (CVE, Financial) in one year is $15.19, suggesting a upside of 24.92% from the current price of $12.1599. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Cenovus Energy Inc (CVE) Summary page.
CVE Key Business Developments
Release Date: February 20, 2025
- Production Growth: Increased by 2.5% from 779,000 boe/day in 2023 to 797,000 boe/day in 2024.
- Oil Sands Production: Increased by 3% year-over-year to 610,700 boe/day.
- Offshore Production: Increased to 67,000 boe/day despite SeaRose being off-station.
- US Refining Throughput: Increased by nearly 100,000 barrels/day to 556,000 barrels/day, with a utilization rate of 91%.
- Adjusted Funds Flow: Over CAD8 billion in 2024.
- Shareholder Returns: CAD3.2 billion returned through dividends, share repurchases, and redemption of preferred shares.
- Net Debt: Achieved CAD4 billion target in 2024.
- Fourth Quarter Operating Margin: CAD2.3 billion.
- Fourth Quarter Adjusted Funds Flow: Approximately CAD1.6 billion.
- Fourth Quarter Free Funds Flow: About CAD125 million.
- Fourth Quarter Shareholder Returns: Over CAD700 million through dividends, share buybacks, and redemption of Series 3 preferred shares.
- Net Debt at Year-End: CAD4.6 billion, an increase of CAD420 million from the previous quarter.
- Oil Sands Operating Margin: Over CAD2.3 billion in the fourth quarter.
- Downstream Operating Margin: Shortfall of CAD396 million in the fourth quarter.
- US Refining Fourth Quarter Throughput: 562,000 barrels/day, utilization rate of 92%.
- Canadian Refining Throughput: 104,000 barrels/day, utilization rate of 97%.
- 2025 Capital Investment Budget: CAD4.6 to CAD5 billion.
- 2025 Production Guidance: 108,000 to 145,000 boe/day, approximately 3% growth from 2024.
- 2025 Crude Throughput Guidance: 650,000 to 685,000 barrels/day, a 3% increase from 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cenovus Energy Inc (CVE, Financial) achieved its best-ever process safety performance in 2024, reducing Tier 1 and Tier 2 process safety events by 44% compared to 2023.
- The company saw a 2.5% increase in upstream production, with Oil Sands segment production growing by about 3% year-over-year.
- Cenovus Energy Inc (CVE) successfully completed major turnarounds at key facilities, including Christina Lake and the Lloyd Upgrader, ahead of schedule.
- The company generated over CAD8 billion of adjusted funds flow in 2024 and returned about CAD3.2 billion to shareholders through dividends, share repurchases, and preferred share redemptions.
- Cenovus Energy Inc (CVE) achieved its CAD4 billion net debt target in 2024, enabling the payout of 100% of excess free funds flow to shareholders.
Negative Points
- The company's net debt increased to CAD4.6 billion at the end of the year, partly due to a weakened Canadian dollar and inventory build-up.
- Downstream operating margin in the fourth quarter was a shortfall of CAD396 million, impacted by inventory timing losses and turnaround costs.
- Weighted average crack spread in the Downstream segment declined by 45% compared to the third quarter, affecting profitability.
- The company faces challenges in maintaining high utilization rates and market capture in its US Refining segment.
- Cenovus Energy Inc (CVE) anticipates a heavy capital investment year in 2025, with CAD4.6 to CAD5 billion planned, raising concerns about potential impacts on free cash flow.
