Cenovus Energy, the Energy sector company, was revisited by a Wall Street analyst today. Analyst Lloyd Byrne from Jefferies reiterated a Buy rating on the stock and has a C$25.00 price target.
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Lloyd Byrne has given his Buy rating due to a combination of factors surrounding Cenovus Energy’s strategic acquisition of MEG Energy. The acquisition is seen as a positive move, enhancing operational efficiencies and aligning with Cenovus’s strengths in upstream Tier 1 oil sands production. This transaction is expected to be accretive to both cash flow per share and free cash flow per share by 2026, indicating a strong financial upside.
Additionally, while the level of debt involved in the acquisition is a point of consideration, it has been well-received and is not expected to overshadow the strategic benefits of the deal. The acquisition, valued at C$7.9 billion, is structured with a mix of cash and equity, providing MEG shareholders with flexibility and aligning with Cenovus’s growth strategy. These factors collectively support Lloyd Byrne’s Buy rating for Cenovus Energy.
In another report released on August 22, National Bank also upgraded the stock to a Buy with a C$28.00 price target.
Based on the recent corporate insider activity of 46 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CVE in relation to earlier this year.