Cenovus Energy Inc (NYSE:CVE) has safely restarted more than 70% of production that was impacted by wildfires in May and its stock has been rewarded over the past week.
The restart of the Superior refinery in Wisconsin and the Toledo refinery in Ohio following the wildfires are “imminent catalysts” for the stock, according to Goldman Sachs.
The Cenovus Energy Analyst: Neil Mehta upgraded the rating for Cenovus Energy from Neutral to Buy, while raising the price target from $20 to $22.
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The Cenovus Energy Thesis: The restarting of the Superior and Toledo refineries should “drive an inflection in Downstream cash flow” in the back half of 2023, Mehta said in the upgrade note.
He added that the Cenovus Energy’s operations, especially refining, are “in the midst of an inflection” and that there is “an improved line-of-sight towards achieving the net debt goal and driving shareholder returns higher.”
So far this year, the stock has underperformed the broader Energy category and its Canadian oil peers, which “allows for an attractive entry point,” the analyst wrote.
CVE Price Action: Shares of Cenovus Energy had declined by 1.29% to $17.26 at the time of publishing Tuesday.
Image courtesy of Cenovus