Cenovus Energy Traded at Undervalue Amid High Oil Prices

Cenovus Energy Inc., ticker CVE, is considered undervalued in comparison to its peers and industry. According to recent data, it trades at 5.97x trailing 12-month Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization (EV/EBITDA), which is lower than the average of 6.11x for the broader industry.

The high price of oil has been a significant factor in CVE's upstream business success. West Texas Intermediate (WTI) is currently trading above $85 per barrel, significantly higher than the shut-in and breakeven prices for existing wells in key resources. This trend is expected to continue, with the U.S. Energy Information Administration (EIA) projecting an average WTI spot price of $80.88 per barrel this year.

CVE's downstream operations are also performing well, with management noting strong refining business results on its second-quarter 2026 earnings call. Canadian and U.S. refinery utilization rates were at about 94% and 96%, respectively, supported by favorable refined-product pricing.

However, investors should be aware of some potential risks. CVE expects higher spending in the second half due to major refinery maintenance, while some large tax payments are due mainly in early 2027. Additionally, the company relies heavily on outside condensate supplies and faces uncertainty around Canada's carbon-tax rules.

Despite these factors, investors who have already invested in CVE may consider holding onto their shares. The stock carries a Zacks Rank #3 (Hold), indicating a neutral rating from analysts.