Cenovus Energy’s Recent Performance
Cenovus Energy Inc. (CVE) is grappling with an industry-wide downturn that has seen a series of downward earnings revisions. The company, which is part of a low-ranked Zacks industry, is among the unfortunate casualties of the unforgiving energy sector, the only one of 11 S&P 500 sectors still in the red over the trailing three months.
Overview of CVE
Cenovus Energy, based in Calgary, is an integrated energy company operating in Canada and the Asia Pacific region. Its activities range from oil and natural gas production to upgrading, refining, and marketing operations in Canada and the U.S.
The Rollercoaster Ride
Since the initial Covid-19 selloff, Cenovus Energy has been on a tumultuous journey mirroring the unpredictable oil and energy prices. The company had witnessed a period of impressive top and bottom-line growth, similar to most of its peers. However, the industry, as a whole, is now in a tough position, facing fierce competition and a slowing global economy.
Zacks estimates project a significant fall of around 33% in Cenovus Energy’s adjusted earnings for FY23, coupled with a 28% decrease in sales.
What Lies Ahead?
Cenovus Energy, currently holding a Zacks Rank #5 (Strong Sell) due to its negative revisions trend, might not be a viable investment option right now. Its stock has endured a sharp decline of -40% in the last 10 years compared to the Zacks Oil and Energy sector’s -20% downturn and the S&P 500’s +180% climb. Moreover, the stock is currently trading below its 21-day, 50-day, and 200-day moving averages.
Nevertheless, considering the long-lasting impact of fossil fuels on the global economy, some investors may still find value in monitoring CVE.
Conclusion
As Cenovus Energy Inc. (CVE) continues to grapple with challenging times, it is essential for investors to approach the stock with caution, especially with its impending earnings report scheduled for February 15. The company’s future in the market may be uncertain; however, the lasting influence of fossil fuels in our economy suggests that CVE could still hold opportunities for the discerning investor.
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