Yahoo Finance Cenovus Energy Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year
Last week saw the newest quarterly earnings release from Cenovus Energy Inc. (TSE:CVE), an important milestone in the company's journey to build a stronger business. It was a solid earnings report, with revenues and earnings both coming in very strong. Revenues were 11% higher than the analysts had forecast, at CA$9.5b, while the company also delivered a surprise statutory profit, against analyst expectations of a loss. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Cenovus Energy
Taking into account the latest results, the most recent consensus for Cenovus Energy from five analysts is for revenues of CA$37.4b in 2021 which, if met, would be a major 103% increase on its sales over the past 12 months. The statutory loss per share is expected to greatly reduce in the near future, narrowing 221% to CA$0.79. Before this earnings report, the analysts had been forecasting revenues of CA$38.1b and earnings per share (EPS) of CA$0.063 in 2021. So despite reconfirming their revenue estimates, the analysts are now forecasting a loss instead of a profit, which looks like a definite drop in sentiment following the latest results.
As a result, there was no major change to the consensus price target of CA$12.47, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. 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$16.00 per share, while the most pessimistic values it at CA$7.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. The analysts are definitely expecting Cenovus Energy's growth to accelerate, with the forecast 158% annualised growth to the end of 2021 ranking favourably alongside historical growth of 8.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.6% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Cenovus Energy is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts are expecting Cenovus Energy to become unprofitable next year. Happily, there were no major changes to revenue forecasts, with the business still expected 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Cenovus Energy analysts - going out to 2023, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 3 warning signs for Cenovus Energy you should know about.
This article by Simply Wall St is general in nature. 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.
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