Revised Targets Following Wednesday’s earnings release, which feature a production guidance reduction and dividend increase, RBC’s Greg Pardy lowered his target for Cenovus Energy Inc. to $28 from $29 with an “outperform” rating. Other changes include: BMO’s Randy Ollenberger to $26 from $27 with an “outperform” rating and Desjardins Securities’ Chris MacCulloch to $33 from $34 with a “buy” rating. The average is $30.83.
“There is plenty of torque in Cenovus’ U,S, refinery segment to drive cash flow but igniting it will require smooth execution across the board,” said Mr. Pardy. “The good news is that the company’s magic $4 billion net debt floor target should be achieved in the fourth-quarter—which opens the door to 100-per-cent shareholder returns on the other side of the mountain. We are maintaining an Outperform recommendation on Cenovus, but trimming our one-year target price by $1 (3 per cent) to $28 per share on the back of lower estimates.”