The Globe and Mail reports in its Wednesday edition that CIBC analysts Dennis Fong, Jamie Kubik and Christopher Thompson made a series of target price adjustments to energy sector stocks in their coverage universe on Tuesday.
The Globe's David Leeder writes that the analysts cut their share target for Cenovus Energy, which they rate "outperformer," by a loonie to $31. Analysts on average target Cenovus shares at $33.33. The CIBC analysts say in a note: "Energy stocks performed well in 2022, and we expect the space will perform favorably in 2023. ... While energy demand has recovered from the pandemic, and we expect the space will continue to naturally benefit from an inflationary environment, excess inflation and rising interest rates also carry potential to spur a recession. We believe prolonged downside risk for the oil price may be limited given a combination of China's re-opening, producer capital discipline, and available global storage capacity. The volatility of this macro environment suggests the best opportunities show a combination of strong FCF yields, balance sheet strength, quality inventory depth, and increasing return of cash to shareholders. We hold a stronger bias for liquids over natural gas for 2023."
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