2023-04-14 15:13:47 ET
Cenovus Energy ( NYSE: CVE ) -2.4% in Friday's trading as Scotiabank downgraded the stock to Sector Perform from Sector Outperform with a C$28 price target, saying the restart of the Superior and Toledo refineries is having a greater than expected impact on its U.S. downstream cash flows.
Margins at the refineries will be weaker than usual as they are restarted and optimized, prompting Scotiabank's Jason Bouvier to expect Wall Street's H1 and FY 2023 estimates will drop meaningfully.
Cenovus' ( CVE ) downstream assets, largely located in the U.S., have lower margins than Canadian peers, so Bouvier believes the company's downstream cash flows will fall more than its Canadian peer group.
The analyst said he continues to expect a potentially sizable increase in Cenovus' ( CVE ) base dividend this spring.
Cenovus Energy ( CVE ) should be able to keep earnings and cash flow growing at a rate higher than production increases, Long Player writes in an analysis posted recently on Seeking Alpha .
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Cenovus Energy cut at Scotiabank on weaker than expected H1 downstream