Cenovus Energy Inc T.CVE

What Am I Missing?

[JohnSP]

I muse be wrong:

Latest presentation pack dated May 7, 2021.

1) PAGE 6: CVE is forecasting net debt to be ~CAD10 bln by end of year (3.3 drop from end Q1)

2) PAGE 13: For every USD1 increase in WTI, Adjusted Funds Flow increases by CAD250 mln.

3) PAGE 17: Price Assumption for forecasts is WTI at USD46.50 !!!

Currently WTI is at USD65, USD8.50 higher so does this mean that Adjusted Funds Flow is an annualized 8.5x250= CAD2.125 bln higher than forecast?

What am I missing?

[TopStockBuy]

You're not missing anything... This stock is beyond stupid cheap.  It's worth double as it sits today with oil staying at these prices all year long. Seems the market is having a hard time figuring out just how much money this company is printing every day in free cash flow.  At $70 WTI, CVE can pay off all their debt and buy back every single share and go private in 5years. 

[RagingBull3]

Oil was about $100 back in 2014.... What was Cash Flow back then?   

[RagingBull3]

CVE share price basically went Horizontal to down back in 2011/12/13/14....   While oil prices were around $90-$100.   Makes you wonder.... All just my opinion/view/thinking.

[TopStockBuy]

$19B cad market cap today (aprox) and CVE is currently producing a 20% -25% cash flow yield????  You can't find cheaper stocks than oil stocks right now.  They are grossly undervalued.  Screaming buy at $2.38.  There is a coordinated effort to devalue oil stocks.  The cash flows won't be ignored forever.  Money will flow back into oil.  

[JohnSP]

@TopStockBuy, from presentation Page 5, CVE ranks themselves as the "Highest Free Cashflow Yield" compared to other oil co's. On your previous comment, just think if WTI goes to USD80 by end of 2021, which is also what Goldan Sachs is forecasting, USD80-CVE's assumed USD46.5 WTI, the mind boggles. CVE share price is one highly compressed spring.

[TopStockBuy]

Definitely the highest amongst the mid caps...there are even bigger yields with the small caps.  CVE is a low cost producer and getting lower.  $80 WTI is just the beginning.  I think we see significantly higher oil prices in 2022.  There simply insn't enough oil being produced to meet the coming demand.  No reason for this stock not to be $18 right now and $20+ in

[JohnSP]

Agree oil will go higher, when I was young working in conventional oil business in Alberta, rule of thumb for no further activity was 6%/yr decline rate, extra heavy oil and multi-fraced wells are different, after Alberta i worked 22 years overseas in several countries and DW, they are also on decline. Carnage in oilpatch staff and CapEx and OpEx budgets pre-covid was record breaking, 1.5

[mrbb]

the joe public have been fooled believing green propaganda and think EV will destory oil demand. Modernization of africa, india, south america, china will keep oil/gas demand high even if EU and US are moving toward EVs, especially when oil/gas investment are discouraged in latter countries.  If you look back at history, more efficient car mean we drive more, just like low calorie ice cream

[RagingBull3]

Wow, look at that, I agree with mrbb!!!   China, India, rest of Asia...etc just getting started over there.... Energy Demand just going to go through the roof over there. All just my opinion/view/thnking.  

[Husky4000]

DCF valuation puts CVE at 32$ for 60$ WTI.   

[RagingBull3]

  CVE share price traded horizontal to down between 2011-2015 from about $38-$30 per share, and that's when oil price traded around $90-100 during those years.   While Past does not mean future performance, and comany is significantly different (Bought Husky)..... The past should give a rough idea about where share price is going. All just my opinion/view/thinking.