Cenovus Energy Inc. Just Missed Earnings - But Analysts Have Updated Their Models

Shareholders might have noticed that Cenovus Energy Inc. (TSE:CVE) filed its second-quarter result this time last week. The early response was not positive, with shares down 9.3% to CA$24.80 in the past week. Statutory earnings per share disappointed, coming in -21% short of expectations, at CA$0.53. Fortunately revenue performance was a lot stronger at CA$18b arriving 15% ahead of predictions. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Cenovus Energy

earnings-and-revenue-growth

Taking into account the latest results, the consensus forecast from Cenovus Energy's four analysts is for revenues of CA$58.7b in 2024. This reflects a credible 4.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 5.5% to CA$2.70. In the lead-up to this report, the analysts had been modelling revenues of CA$57.3b and earnings per share (EPS) of CA$2.77 in 2024. So it's pretty clear consensus is mixed on Cenovus Energy after the latest results; whilethe analysts lifted revenue numbers, they also administered a minor downgrade to per-share earnings expectations.

There's been no major changes to the price target of CA$33.94, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Cenovus Energy, with the most bullish analyst valuing it at CA$38.00 and the most bearish at CA$30.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Cenovus Energy's revenue growth is expected to slow, with the forecast 9.8% annualised growth rate until the end of 2024 being well below the historical 27% 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 4.7% annually. Even after the forecast slowdown in growth, it seems obvious that Cenovus Energy is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Cenovus Energy analysts - going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Cenovus Energy that we have uncovered.

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.

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