Valued at a market cap of $41.6 billion, Cenovus Energy (TSX:CVE) is a Canadian integrated energy company that develops oil sands, refines petroleum products, and operates across multiple segments, including oil sands, conventional, offshore, and both Canadian and U.S. refining operations.
Its primary assets include major oil sands projects, such as Christina Lake, Foster Creek, and Sunrise, in northern Alberta and Saskatchewan, as well as natural gas operations across western Canada.
Cenovus operates a growing portfolio of downstream infrastructure, including the Lloydminster upgrading complex, which converts heavy oil into synthetic crude and other products, as well as refining facilities that produce gasoline, diesel, and jet fuel. Cenovus also maintains offshore exploration activities and crude-by-rail terminals.
Key growth catalysts include the Narrows Lake project, which is expected to produce its first oil in the third quarter (Q3) of 2025. The project features a 17 km operational tieback pipeline accessing high-quality reserves at reduced costs. Moreover, the offshore West White Rose project aims to achieve first oil by Q2 of 2026, with gravity-based structure installation planned for summer 2025.
Cenovus focuses on optimizing steam capacity across existing operations while maintaining disciplined cost management and expanding downstream capabilities.
In the last 10 years, CVE stock has returned 71% to shareholders, after adjusting for dividend reinvestments. Let’s see if this TSX energy stock is a good buy right now.
Is Cenovus Energy a good stock to own?
In Q2 of 2025, Cenovus reported an adjusted funds flow of $1.5 billion, despite production impacts from the Caribou Lake wildfire that temporarily shut down Christina Lake operations.
Earlier this month, the TSX energy giant disclosed plans to acquire MEG Energy for $7.9 billion. The deal combines two leading SAGD (steam-assisted gravity drainage) operators, with MEG’s 110,000 barrel-per-day Christina Lake asset directly adjacent to Cenovus’s existing operations.
Management expects synergies to grow from $150 million annually in 2026-2027 to over $400 million by 2028, driven by operational efficiencies and development optimization.
The downstream business performed well in Q2, with Canadian refining achieving a record quarterly throughput of 112,000 barrels per day at 104% utilization. Major turnarounds at Foster Creek, Sunrise, and Toledo refineries were completed ahead of schedule and under budget, positioning the company for improved operational performance.
Financially, Cenovus maintains a strong balance sheet with net debt of $4.9 billion, a decrease of $150 million quarter over quarter. The company returned $819 million to shareholders through dividends and share buybacks, while continuing to reduce its debt toward its $4 billion target.
With primary maintenance cycles concluding and growth projects approaching startup, Cenovus appears well-positioned to generate increased free cash flow and enhance shareholder returns.
What is the target price for the TSX dividend stock?
Analysts tracking CVE stock forecast adjusted earnings to expand from $1.91 per share in 2024 to $2.02 per share in 2027. Today, CVE stock trades at a forward price-to-earnings multiple of 15.4 times, which is higher than its 10-year average of 10.6 times.
If the TSX stock is priced at 13 times earnings, it should trade at $26 per share in early 2027, indicating an upside potential of 10% from current levels. If we adjust for dividends, cumulative returns could be closer to 20% over the next 18 months. Given consensus price targets, CVE stock trades at a 16% discount in August 2025.
