Analysts' Revenue Estimates For Cenovus Energy Inc. (TSE:CVE) Are Surging Higher

Cenovus Energy Inc. (TSE:CVE) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following the upgrade, the latest consensus from Cenovus Energy's four analysts is for revenues of CA$74b in 2022, which would reflect a sizeable 59% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 1,354% to CA$4.06. Before this latest update, the analysts had been forecasting revenues of CA$62b and earnings per share (EPS) of CA$3.77 in 2022. Sentiment certainly seems to have improved in recent times, with a decent improvement in revenue and a small lift in earnings per share estimates.

See our latest analysis for Cenovus Energy

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of CA$27.21, suggesting that the forecast performance does not have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Cenovus Energy at CA$38.00 per share, while the most bearish prices it at CA$21.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the 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 59% annualised growth to the end of 2022 ranking favourably alongside historical growth of 16% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Cenovus Energy to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Cenovus Energy.

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 2024, and you can see them free on our platform here.

We also provide an overview of the Cenovus Energy Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.