TD Cowen analyst Menno Hulshof maintained a Buy rating on Cenovus Energy today and set a price target of C$29.00.
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Menno Hulshof’s rating is based on several compelling factors. Firstly, Cenovus Energy has demonstrated a significant rally since April, indicating a positive shift in both upstream and downstream operations. The company’s strong balance sheet positions it well to withstand short-term oil price fluctuations, while the potential integration with MEG Energy offers additional upside potential. Furthermore, the company’s Q3 downstream results have been robust, showcasing higher market capture on its operated assets compared to divested non-operated assets.
Looking ahead, Cenovus Energy is poised for substantial growth, with expectations of increased upstream production and free cash flow in the coming years. The company plans to expand its production capacity significantly through its legacy assets and the MEG acquisition. Additionally, strategic growth investments were made during a period of low cost inflation, which could yield further benefits. These factors, combined with a favorable valuation outlook, underpin Hulshof’s Buy rating for Cenovus Energy.
In another report released on November 27, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a C$27.00 price target.