Cenovus Energy Maintained at Buy at TPH Ahead of Q3 Results; Price Target at C$30.00
09:20 AM EDT, 10/24/2024 (MT Newswires) -- Tudor, Pickering, Holt on Thursday maintained its buy rating on the shares of Cenovus Energy (CVE.TO, CVE) with a C$30.00 price target ahead of third-quarter results from the oil producer and refiner.
"Updating our model for September production data and mark-to-market factors puts our cash flow estimate ahead of consensus, at TPHe C$2.15B vs. Street (survey) C$2.06B. Granted, sell-side survey responses were submitted prior to the latest wave of production data, which surprised to the upside for CVE (particularly at Christina Lake, and to a lesser degree Sunrise) and could have estimates nudge higher ahead of earnings next Thursday; TPHe 778mboepd total production vs. Street 759, and TPHe C$2.72B op. margin vs. Street C$2.63B. In our model, the increase in our production outlook was more than offset by weakness in downstream product pricing, weakness in margins, and turnaround costs; TPHe 637mbopd total throughput compares to Street 644, with our combined op. margin at TPHe -C$65MM vs. Street -C$59MM (TPHe -C$146MM vs. Street -C$141MM for US; TPHe C$81MM vs. Street C$82MM for Canadian). Big picture, we continue to believe that as the downstream business stabilizes over time, the high-quality upstream asset base would increasingly stand out relative to both peers and in the context of the total enterprise. However, in order for the market to ascribe credit, the business would likely need to show improvements to the cost structure and increased margin capture," analyst Jeoffrey Lambujon noted
(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)
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