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Cenovus Energy Inc. Just Beat EPS By 36%: Here's What Analysts Think Will Happen Next

Cenovus Energy Inc. (TSE:CVE) investors will be delighted, with the company turning in some strong numbers with its latest results. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 11% higher than the analysts had forecast, at CA$16b, while EPS were CA$0.62 beating analyst models by 36%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Cenovus Energy

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Taking into account the latest results, the current consensus from Cenovus Energy's five analysts is for revenues of CA$58.9b in 2024. This would reflect a solid 10% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 26% to CA$3.11. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$56.2b and earnings per share (EPS) of CA$2.71 in 2024. So it seems there's been a definite increase in optimism about Cenovus Energy's future following the latest results, with a nice increase in the earnings per share forecasts in particular.

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Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of CA$33.30, suggesting that the forecast performance does not have a long term impact on the company's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Cenovus Energy analyst has a price target of CA$38.00 per share, while the most pessimistic values it at CA$30.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Cenovus Energy's revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2024 being well below the historical 28% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.6% annually. So it's pretty clear that, while Cenovus Energy's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Cenovus Energy's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at CA$33.30, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Cenovus Energy going out to 2026, and you can see them free on our platform here..

It might also be worth considering whether Cenovus Energy's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.