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Research Alert: CFRA Maintains Buy Recommendation On Shares Of Cenovus Energy Inc.

05/07/2021 11:04

02:55 PM EDT, 05/07/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We raise our target to $10 from $8, reflecting a 4.1x multiple of EV-to-projected '22 EBITDA, a discount to CVE's 5-year average multiple (6.9x) and the recent peer average (6.1x). We raise our '21 EPS estimate to CAD0.36 from -CAD0.27 and keep '22's at CAD0.65. CVE prints Q1 EPS of CAD0.10 vs. -CAD0.97, beating the -CAD0.06 consensus forecast. Operating margin was nearly CAD1.9B during Q1 compared to -CAD589M in Q1 of 2020 due to higher commodity prices and sales volumes. The company remains on track to deliver CAD1B in synergies this year from its recent acquisition of Husky Energy and expects to exit the year with a $C1.2B annualized synergistic run rate (potential for upward revision as management reassesses some legacy Husky assets). We continue to see rather subdued expectations for CVE given the implied 16% yield on expected 2022 free cash flow is well above the 7.5% peer average, and think this is largely unwarranted as the company remains well-positioned to capitalize on a recovering macro economy.