-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:
Our downgrade is due to the widening differential observed by CVE's peers, with West Texas Intermediate (WTI) prices rising faster than Western Canadian Select (WCS), and an increasing possibility of global economic demand degradation over time. CVE has reaped the benefits thus far. However, price volatility to the downside remains a threat. We lower our 12-month target price to USD25. This reflects a 5.5x EBITDA multiple of our FY 27 EBITDA estimate. CVE's long-term average is 5.7x. We raise our FY 26 EPS estimate to CAD3.89 (+0.42) and FY 27 to CAD2.80 (+0.05). CVE will use this "sugar rush" in oil pricing to de-lever aggressively; however, peers operate more efficiently (SU) and can return all excess FCF to shareholders if they wish (SU, IMO), whereas CVE is currently only able to return 50% of excess free cash flows.