Another Upgrade 11:06 AM EST, 01/18/2022 (MT Newswires) -- Tudor, Pickering and Holt on Tuesday reiterated its buy rating on the shares of Cenovus Energy (CVE.TO) while raising its target price to C$22.00 from C$19.00 as it revised its expectations for the oil producer and refiner's fourth-quarter results.
"Our updated model ahead of Q4'21 results has our FCF estimate sitting below the Street despite our upstream volumes trending higher, owing to better than expected performance across the oil sands portfolio heading into year-end," analyst Matt Murphy noted. "We model 823mboepd vs. the Street at 790mboepd, with continued strong performance at FCCL and the Lloyd thermals (hitting 100mbpd in November) boosting our forecasts. In the downstream, we model U.S. refining EBITDA of C$11MM, with our forecast lowered due to weaker benchmark cracks in the Chicago market Q/Q and greater Lima refinery turnaround impacts. Overall, we forecast cash flow of C$1.03/shr vs. the Street at C$1.14/shr, with an estimated C$769MM in capital (Street C$719MM) driving C$1.3B in pre-dividend free cash flow in the quarter (Street C$1.6B). At quarter's end, we model net debt of C$9.3B, boosted by ~C$510MM in divestment proceeds in the quarter, with net debt on strip pricing expected to breach the C$8B threshold in the Q2'22 timeframe, at which point the company anticipates a greater balance in capital allocation beyond debt reduction."
(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)
Price: 18.66, Change: -0.33, Percent Change: -1.74