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Cenovus Energy Inc CVE

Morningstar’s Analysis

Currency in USD

Economic Moat


Capital Allocation


Cenovus Reports a Disappointing Quarter, but Stock Looks Cheap

Joe Gemino, CPA Senior Equity Analyst

Analyst Note

| Joe Gemino, CPA |

No-moat Cenovus Energy reported fourth-quarter results for its legacy business, which excludes the legacy Husky Energy operations. Cenovus reported adjusted funds flow from operations of CAD 341, which fell below our expectations and declined sequentially. The lower cash flow was a result of unfavorable downstream conditions and lower upstream operating netbacks. Despite the disappointing results, Cenovus was still able to generate positive adjusted free funds flow of CAD 99 million. The downstream segment generated a negative operating margin of CAD 73 million, which was driven by lower product demand and pricing. Refining throughput averaged 133 thousand barrels of oil equivalent per day, a substantial decrease from 191 mboe/d in the third quarter.

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Company Profile

Business Description

Cenovus Energy is an integrated oil company, focused on creating value through the development of its oil sands assets. The company also engages in production of conventional crude oil, natural gas liquids, and natural gas in Alberta, Canada, with refining operations in the U.S. Net upstream production averaged 472 thousand barrels of oil equivalent per day in 2020, and the company estimates that it holds 6.7 billion boe of proven and probable reserves.

225 - 6 Avenue SW, Suite 4100
Calgary, AB, T2P 1N2, Canada
T +1 403 766-3770
Sector Energy
Industry Oil & Gas Integrated
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 2,413