Cenovus Energy (CVE:CA)(CVE)
TD Securities recently maintained its Buy rating on Cenovus and raised its price target to $50 from $49. Cenovus this summer reported $3.8 billion in second-quarter free funds flow and production of about 970,000 barrels of oil equivalent per day. Its proposed $5.7 billion acquisition of Athabasca Oil could add roughly 45,000 barrels per day, subject to closing.
Outlook: Strong cash flow supports TD’s positive view. The next tests are whether Cenovus can complete and integrate the acquisition, continue reducing debt, and maintain returns if oil prices weaken going forward. Analysts are now looking towards the company’s October 3oth earnings to see if the production growth continues.
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