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Cenovus Energy Inc (TSE:CVE)
TSX:CVE
Top Page
Cenovus Energy
(TSX:CVE)
67Neutral
Positive Factors
Analyst Recommendations
Analyst's recommendation maintains a 'BUY' rating for Cenovus Energy, suggesting confidence in the company's future performance.
Growth Initiatives
The start-up of Narrows Lake and completion of offshore facility installation are key milestones for Cenovus Energy's growth initiatives.
Negative Factors
Downstream Challenges
Cenovus will have to dramatically improve its U.S. refining performance in order to achieve the ~$1.5 billion operating margin it put forward at its investor day and regain investor confidence.
Refining Margins
The company faces weak refining margins and additional costs from the Lima turnaround, impacting financial performance.
Cenovus Energy (CVE) vs. S&P 500 (SPY)
Market Cap
$33.12B
Dividend Yield4.02%
Average Volume (3M)6.90M
Price to Earnings (P/E)10.8
Beta (1Y)1.22
Revenue Growth3.97%
EPS Growth-22.22%
CountryCA
Employees7,150
SectorEnergy
Sector Strength74
IndustryOil & Gas Integrated
Share Statistics
EPS (TTM)1.67
Shares Outstanding1,823,629,000
10 Day Avg. Volume5,567,531
30 Day Avg. Volume6,897,656
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.68
Price to Cash Flow (P/CF)4.60
P/FCF Ratio4.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$29.59Price Target Upside84.91% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
Cenovus Energy Business Overview & Revenue Model
Company DescriptionCenovus Energy Inc., together with its subsidiaries, develops, produces, and markets crude oil, natural gas liquids, and natural gas in Canada, the United States, and the Asia Pacific region. The company operates through Oil Sands, Conventional, Offshore, Canadian Manufacturing, U.S. Manufacturing, and Retail segments. The Oil Sands segment develops and produces bitumen and heavy oil in northern Alberta and Saskatchewan. This segments Foster Creek, Christina Lake, Sunrise, and Tucker oil sands projects, as well as Lloydminster thermal and conventional heavy oil assets The Conventional segment holds assets primarily located in Elmworth-Wapiti, Kaybob-Edson, Clearwater, and Rainbow Lake operating in Alberta and British Columbia, as well as interests in various natural gas processing facilities. The offshore segment engages in the exploration and development activities. The Canadian Manufacturing segment includes the owned and operated Lloydminster upgrading and asphalt refining complex, which upgrades heavy oil and bitumen into synthetic crude oil, diesel fuel, asphalt, and other ancillary products, as well as owns and operates the Bruderheim crude-by-rail terminal and two ethanol plants. The U.S. Manufacturing segment comprises the refining of crude oil to produce diesel, gasoline, jet fuel, asphalt, and other products. The Retail segment consists of marketing of its own and third-party refined petroleum products through retail, commercial, and bulk petroleum outlets, as well as wholesale channels. Cenovus Energy Inc. was founded in 2009 and is headquartered in Calgary, Canada.
How the Company Makes MoneyCenovus Energy generates revenue primarily through the exploration, production, and sale of crude oil, natural gas, and natural gas liquids. The company's key revenue streams include its oil sands operations, which involve the extraction of bitumen from Canadian oil sands deposits, and its conventional oil and gas operations, which produce from various onshore and offshore fields. Cenovus also owns and operates refining and marketing assets, allowing the company to capture value across the entire supply chain from production to the end customer. Additionally, strategic partnerships and joint ventures, such as those with refining partners, enhance its market access and operational efficiencies, contributing to its earnings.
Cenovus Energy Financial Statement Overview
Summary
Cenovus Energy demonstrates strong resilience and adaptability in the fossil fuels industry. The company shows healthy revenue growth and cash flow generation, although profitability margins have seen some pressure. The balance sheet remains solid with manageable debt levels and a strong equity base. Overall, Cenovus appears well-positioned to navigate market challenges while maintaining a stable financial footing.Income Statement
Cenovus Energy's income statement shows a mixed performance. The gross profit margin in 2024 was approximately 22.1%, reflecting effective cost management relative to revenue. However, net profit margin decreased to 5.4% from 7.9% in 2023, indicating reduced profitability. Revenue growth was robust at 10.5% from 2023 to 2024, showing strong sales performance despite industry challenges. The EBIT margin for 2024 was 0% due to EBIT being zero, but the EBITDA margin was healthy at 16.6%.70
Positive
Balance Sheet
The balance sheet of Cenovus Energy indicates a reasonably stable financial position. The debt-to-equity ratio improved to 0.36 in 2024 from 0.35 in 2023, suggesting prudent debt management. Return on equity (ROE) was 10.6%, which is a positive sign of efficiency in generating profits from shareholders' equity. The equity ratio stood at 52.6%, indicating a solid equity base relative to total assets.75
Positive
Cash Flow
Cenovus Energy's cash flow statement highlights a strong cash generation ability. Free cash flow grew by 36.6% from 2023 to 2024, signaling improved operational efficiency. The operating cash flow to net income ratio was 2.94, indicating robust operating cash relative to net income. The free cash flow to net income ratio was 1.34, which is a positive sign of cash flow strength relative to its profits.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 57.73B | 52.20B | 71.77B | 48.81B | 13.59B | Gross Profit |
| 12.77B | 6.16B | 16.89B | 9.11B | 200.00M | EBIT |
| 0.00 | 5.62B | 10.97B | 3.88B | -2.17B | EBITDA |
| 9.59B | 10.23B | 13.90B | 6.66B | 770.00M | Net Income Common Stockholders |
| 3.14B | 4.11B | 6.45B | 587.00M | -2.38B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 3.09B | 2.23B | 4.52B | 2.87B | 378.00M | Total Assets |
| 56.54B | 53.91B | 55.87B | 54.10B | 32.77B | Total Debt |
| 10.63B | 9.95B | 11.64B | 15.42B | 9.32B | Net Debt |
| 7.54B | 7.72B | 7.12B | 12.55B | 8.94B | Total Liabilities |
| 26.77B | 25.20B | 28.28B | 30.50B | 16.06B | Stockholders Equity |
| 29.75B | 28.70B | 27.58B | 23.60B | 16.71B |
| Cash Flow | Free Cash Flow | |||
| 4.22B | 3.09B | 7.64B | 3.36B | -586.00M | Operating Cash Flow |
| 9.23B | 7.39B | 11.40B | 5.92B | 273.00M | Investing Cash Flow |
| -5.13B | -5.29B | -2.31B | -942.00M | -863.00M | Financing Cash Flow |
| -3.50B | -4.31B | -7.68B | -2.51B | 837.00M |
Cenovus Energy Technical Analysis
Negative
16.00
Price Trends
20.04
Negative
20.77
Negative
22.51
Negative
Market Momentum
0.05
Negative
51.96
Neutral
41.47
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CVE, the sentiment is Negative. The current price of 16 is below the 20-day moving average (MA) of 19.40, below the 50-day MA of 20.04, and below the 200-day MA of 22.51, indicating a bearish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 51.96 is Neutral, neither overbought nor oversold. The STOCH value of 41.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CVE.
Cenovus Energy Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Performance Comparison
TSE:CVE
Cenovus Energy
16.00
-12.05
-42.95%
BTE
Baytex Energy
1.62
-2.18
-57.37%
CNQ
Canadian Natural
27.58
-10.89
-28.31%
IMO
Imperial Oil
63.47
-7.88
-11.04%
SU
Suncor Energy
33.20
-3.91
-10.54%
TSE:TOU
Tourmaline Oil
62.18
0.28
0.45%
Cenovus Energy Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -27.46% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance in safety and production growth in the Oil Sands segment, increased crude throughput in Downstream, significant shareholder returns, and successful completion of major project milestones. However, the Downstream segment faced challenges with operating margin shortfalls and a decline in crack spreads, along with an increase in net debt due to currency fluctuations and inventory build. Despite these challenges, the achievements and strategic milestones suggest a positive outlook for the company.Highlights
Best-Ever Process Safety Performance
Cenovus achieved its best-ever process safety performance with a 44% reduction in Tier 1 and Tier 2 process safety events compared to 2023, and a 23% decrease in lost time injuries.
Oil Sands Segment Production Growth
Production in the Oil Sands segment increased by about 3% year-over-year to 610,700 boe per day, contributing to overall production growth.
Increased Crude Throughput in Downstream
Crude throughput increased by 87,000 barrels per day year-over-year to 647,000 barrels per day in 2024, with U.S. Refining throughput increasing by nearly 100,000 barrels per day.
Significant Return to Shareholders
Cenovus returned about CAD3.2 billion to shareholders through dividends, share repurchases, and redemption of preferred shares in 2024.
Achievement of Net Debt Target
Cenovus achieved its CAD4 billion net debt target in 2024, allowing the company to pay out 100% of excess free funds flow.
Major Project Milestones Achieved
Mechanical completion of the Narrows Lake pipeline was reached, and significant progress was made on the West White Rose and Foster Creek optimization projects.
Lowlights
Downstream Operating Margin Shortfall
The Downstream operating margin in Q4 was a shortfall of CAD396 million, affected by an inventory timing loss, turnaround costs, and a shortfall from non-operated refining assets.
Impact of Canadian Dollar and Inventory Build on Net Debt
Net debt increased by about CAD420 million from the previous quarter due to a weakened Canadian dollar and a temporary build in inventory.
Decline in Weighted Average Crack Spread
The weighted average crack spread, net of RINs, averaged $8.20 per barrel in Q4, a decline of 45% compared to the third quarter, impacting Downstream performance.
Company Guidance
During Cenovus Energy's 2024 year-end and fourth-quarter results conference call, the company reported significant operational and financial achievements. Notably, Cenovus achieved a 44% reduction in Tier 1 and Tier 2 process safety events and a 23% decrease in lost time injuries compared to 2023. Production increased by approximately 2.5% from 779,000 boe per day in 2023 to 797,000 boe per day in 2024, with the Oil Sands segment reaching 610,700 boe per day, a 3% year-over-year increase. The company's U.S. Refining throughput rose by nearly 100,000 barrels per day to 556,000 barrels per day, achieving a 91% utilization rate, while Canadian Refining throughput reached 104,000 barrels per day, with a 97% utilization rate. Financially, Cenovus generated over CAD8 billion in adjusted funds flow and returned about CAD3.2 billion to shareholders through dividends and share repurchases. The fourth-quarter results included a CAD2.3 billion operating margin and CAD1.6 billion in adjusted funds flow. The company met its CAD4 billion net debt target and plans to focus on sustaining capital projects with a capital investment budget of CAD4.6 to CAD5 billion for 2025, aiming for a 3% growth in production and improved downstream performance.Cenovus Energy Corporate Events
DividendsBusiness Operations and Strategy
Cenovus Energy to Redeem Series 5 Preferred Shares
Positive
Feb 27, 2025
Cenovus Energy announced its decision to redeem all 8 million of its 4.591% Series 5 Preferred Shares on March 31, 2025, at a price of $25.00 per share, totaling $200 million. This strategic financial move, funded primarily from cash on hand, will conclude with a final dividend payment on the shares, reflecting Cenovus’s ongoing efforts to optimize its capital structure and enhance shareholder value.
Business Operations and StrategyFinancial Disclosures
Cenovus Energy Reports Record Oil Sands Production and Strong Financial Results for 2024
Positive
Feb 20, 2025
Cenovus Energy reported robust financial and operational performance for the fourth quarter and full-year 2024. The company achieved record production levels in its Oil Sands operations and improved throughput in its Downstream business. Key growth projects, such as the Narrows Lake pipeline and the West White Rose project, reached significant milestones, positioning the company for long-term value delivery. Additionally, Cenovus returned $706 million to shareholders, indicating a strong commitment to shareholder value.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.