These Analysts Think Cenovus Energy Inc.'s (TSE:CVE) Sales Are Under Threat

The latest analyst coverage could presage a bad day for Cenovus Energy Inc. (TSE:CVE), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the current consensus, from the four analysts covering Cenovus Energy, is for revenues of CA$48b in 2025, which would reflect an uncomfortable 12% reduction in Cenovus Energy's sales over the past 12 months. Statutory earnings per share are presumed to shoot up 22% to CA$2.07. Previously, the analysts had been modelling revenues of CA$55b and earnings per share (EPS) of CA$2.13 in 2025. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a substantial drop in revenue estimates and a small dip in EPS estimates to boot.

Check out our latest analysis for Cenovus Energy

Analysts made no major changes to their price target of CA$29.46, suggesting the downgrades are not expected to have a long-term impact on Cenovus Energy's valuation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 12% by the end of 2025. This indicates a significant reduction from annual growth of 23% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.6% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Cenovus Energy is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Cenovus Energy after today.

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 2027, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.