Is Cenovus Energy Inc. (CVE) A Good Investment?

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Cenovus Energy Inc. (NYSE:CVE) finished Thursday with an addition of $0.51 to close at $19.30, an upside of 2.71 percent. An average of 3,310,300 shares of common stock have been traded in the last five days. There was a gain of $0.24 in the past week, and it reached a new high 44 times over the past 12 months. The last 20 days have seen an average of 4,942,240 shares traded, while the 50-day average volume stands at 6,474,278.

CVE stock has decreased by -5.25% in the last month. The company shares reached their 1-month lowest point of $17.41 on 12/16/22. With the stock rallying to its 52-week high on 06/08/22, shares of the company touched a low of $12.00 and a high of $24.81 in 52 weeks. It has reached a new high 42 times so far this year and achieved 57.81% or $7.02 in price. In spite of this, the price is down -22.20% from the 52-week high.

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Valuation Metrics

Cenovus Energy Inc. (CVE) has a trailing price-to-earnings (P/E) ratio of 10.18. The stock’s beta is 2.29. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 0.72, the price-to-book (PB) ratio at 1.86, and the price-to-cash flow ratio at 9.46.

The company has a payout ratio of 10.80%. The company’s most recent quarterly dividend payment was $0.0760 a share, representing a down of -9.09% from $0.0836 last year.

Financial Health

The quick ratio of Cenovus Energy Inc. for the three months ended September 29 was 1.00, and the current ratio was 1.50, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.42 and a total debt to equity ratio of 0.43 for the quarter ending September 29. Its gross profit as reported stood at $2.59 billion compared to revenue of $36.99 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Cenovus Energy Inc.’s return on assets was 9.50%.

Earnings Surprise

For the three-month period that ended September 29, Cenovus Energy Inc. had $7.66 million in cash and short-term investments compared to $149.37 million in total debt. In the quarter under review, the net income was down than the previous quarter. The company posted a net income of $1.68 billion in the quarter, while revenues were grew 221.65%. The analyst consensus anticipated Cenovus Energy Inc.’s latest quarter earnings to come in at $0.72 per share, but it turned out to be $0.6, a -16.70% surprise. For the quarter, EBITDA amounted to $2.14 billion.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Cenovus Energy Inc. (CVE) price momentum. RSI 9-day as of the close on 29 December was 55.08%, suggesting the stock is Neutral, with historical volatility in this time frame at 51.52%.

As of today, CVE’s price is $19.11 +1.26% or $0.24 from its 5-day moving average. CVE is currently trading -2.97% lower than its 20-day SMA and +12.87% higher than its 100-day SMA. However, the stock’s current price level is +13.00% above the SMA50 and +29.10% above the SMA200.

The stochastic %K and %D were 77.08% and 82.23%, respectively, and the average true range (ATR) was 0.79. With the 14-day stochastic at 78.75% and the average true range at 0.81, the RSI (14) stands at 52.46%. The stock has reached 0.54 on the 9-day MACD Oscillator while the 14-day reading was at 0.75.

Analyst Ratings

Goldman downgraded Cenovus Energy Inc. (NYSE: CVE) to a a Neutral rating in its most recent analyst report. Previously, the stock was rated as a Buy.

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