Credit Suisse (CS) says Canadian energy co is transferring value from debt to equity holders, upgrades to “outperform” from “neutral.” CS says in the next 3 quarters, CVE could be looking to lower net debt by C$800 mln-C$1 bln every quarter.
Brokerage says while CVE has not put out explicit divesture targets, those opportunities do exist as CVE is looking very closely at all of Husky Energy Inc’s assets.
.CVE acquired Husky Energy last year and is focused on repaying net debt this year to a target of C$10 bln.
“We are already seeing CVE improve performance of HSE’s heavy oil assets by lower sustaining capex as well as cutting operating cost,” says CS. CS has raised PT on CV to C$15 from C$13.
According to Refinitiv data, Sixteen of 19 brokerages rate the stock “buy” or higher, two “hold” and one “sell” or lower; their median PT is C$14. CVE is up ~32% YTD, as of last close.