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BlackRock Inc. bought a new stake in Cenovus Energy Inc (NYSE:CVE – Free Report) (TSE:CVE) during the second quarter, according to its most recent 13F filing with the SEC. The institutional investor bought 7,389,302 shares of the oil and gas company’s stock, valued at approximately $183,329,000. BlackRock Inc. owned approximately 0.40% of Cenovus Energy at the end of the most recent quarter.

Several other hedge funds also recently modified their holdings of the company. J.W. Cole Advisors Inc. lifted its stake in shares of Cenovus Energy by 3.9% during the fourth quarter. J.W. Cole Advisors Inc. now owns 13,407 shares of the oil and gas company’s stock valued at $227,000 after buying an additional 500 shares during the period. Gateway Investment Advisers LLC boosted its position in Cenovus Energy by 0.6% during the fourth quarter. Gateway Investment Advisers LLC now owns 93,986 shares of the oil and gas company’s stock worth $1,590,000 after acquiring an additional 523 shares during the last quarter. International Assets Investment Management LLC grew its stake in Cenovus Energy by 0.9% in the 4th quarter. International Assets Investment Management LLC now owns 65,248 shares of the oil and gas company’s stock worth $1,104,000 after acquiring an additional 565 shares during the period. OLD National Bancorp IN grew its stake in Cenovus Energy by 5.2% in the 1st quarter. OLD National Bancorp IN now owns 12,597 shares of the oil and gas company’s stock worth $334,000 after acquiring an additional 618 shares during the period. Finally, Farther Finance Advisors LLC raised its holdings in Cenovus Energy by 24.4% in the 4th quarter. Farther Finance Advisors LLC now owns 3,307 shares of the oil and gas company’s stock valued at $56,000 after acquiring an additional 649 shares during the last quarter. 51.19% of the stock is owned by institutional investors and hedge funds.

Analyst Upgrades and Downgrades A number of brokerages have weighed in on CVE. Zacks Research lowered Cenovus Energy from a “strong-buy” rating to a “hold” rating in a research note on Tuesday, June 16th. Weiss Ratings raised Cenovus Energy from a “hold (c+)” rating to a “buy (b-)” rating in a research report on Tuesday, August 11th. Scotiabank reiterated an “outperform” rating on shares of Cenovus Energy in a research note on Thursday, July 30th. Desjardins upgraded Cenovus Energy to a “moderate buy” rating in a research report on Thursday, July 16th. Finally, Morgan Stanley reiterated an “overweight” rating on shares of Cenovus Energy in a research report on Wednesday, August 19th. One analyst has rated the stock with a Strong Buy rating, thirteen have issued a Buy rating and two have issued a Hold rating to the company. Based on data from MarketBeat, Cenovus Energy has an average rating of “Moderate Buy” and a consensus price target of $36.25.

Check Out Our Latest Analysis on Cenovus Energy Cenovus Energy Stock Performance NYSE:CVE opened at $31.71 on Friday. The company has a quick ratio of 1.04, a current ratio of 1.63 and a debt-to-equity ratio of 0.25. The company has a market cap of $58.65 billion, a P/E ratio of 12.20 and a beta of 0.34. Cenovus Energy Inc has a fifty-two week low of $15.63 and a fifty-two week high of $33.40. The firm’s 50 day moving average is $28.27 and its two-hundred day moving average is $26.83.

Cenovus Energy (NYSE:CVE – Get Free Report) (TSE:CVE) last released its quarterly earnings data on Wednesday, July 29th. The oil and gas company reported $1.11 EPS for the quarter, hitting analysts’ consensus estimates of $1.11. The business had revenue of $14.59 billion during the quarter, compared to the consensus estimate of $11.87 billion. Cenovus Energy had a return on equity of 21.08% and a net margin of 12.37%.The business’s revenue for the quarter was up 47.9% on a year-over-year basis. During the same period in the prior year, the firm posted $0.45 EPS. Analysts expect that Cenovus Energy Inc will post 3.2 EPS for the current year.

Cenovus Energy Dividend Announcement The company also recently declared a quarterly dividend, which will be paid on Tuesday, September 29th. Shareholders of record on Tuesday, September 15th will be given a dividend of $0.22 per share. This represents a $0.88 dividend on an annualized basis and a yield of 2.8%. The ex-dividend date of this dividend is Tuesday, September 15th. Cenovus Energy’s payout ratio is 24.62%.

About Cenovus Energy (Free Report)

Cenovus Energy Inc is a Canadian integrated energy company engaged in the exploration, development and production of crude oil, natural gas liquids and natural gas, together with downstream refining and marketing activities. Headquartered in Calgary, Alberta, Cenovus operates a mix of oil sands thermal and dilbit assets, conventional oil and gas properties, and owns refining and midstream assets designed to move and process hydrocarbons into finished petroleum products for commercial markets.

The company was originally formed as a spin‑off from Encana Corporation in 2009 and has grown through organic development and strategic acquisitions.

Read More Five stocks we like better than Cenovus Energy Nutanix’s Rally Has a Bigger Story Than Earnings as AMD’s AI Bet Takes Shape SEC Probe Puts Wall Street Leverage Risk Back in Focus A Bearish-Dollar Options Surge Raises the Stakes for Warsh at Jackson Hole Five Below’s Turnaround Is Working—But Has the Stock Run Too Far?

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Key Takeaways Cenovus' upstream production increased 27% to 970.4 thousand Boe/d in Q2 2026.Downstream operating margin rebounded to C$953 million as U.S. Refining posted strong gains.Rising 2026 earnings estimates support the rally, but valuation near its five-year sales peak raises the bar. Cenovus Energy Inc. (CVE - Free Report) has gained 13.7% in the past month, extending a sharp 2026 advance. The rally now puts more weight on whether operating momentum can keep supporting the shares.

Production growth, a refining rebound and positive earnings estimate revisions strengthen the case. Valuation is less forgiving, however, with the stock trading near the top of its five-year sales-multiple range.

CVE's Oil Sands Growth Adds Fundamental SupportSecond-quarter upstream production reached 970.4 thousand barrels of oil equivalent per day, up 27% year over year. Oil Sands production rose to 786.4 thousand barrels of oil equivalent per day from 579.8 thousand a year earlier, helped by additional MEG volumes, Christina Lake redevelopment, Narrows Lake and Foster Creek gains.

The growth runway remains visible. Cenovus raised the midpoint of its 2026 upstream production guidance to a range of 970 thousand barrels of oil equivalent per day to 1.01 million barrels of oil equivalent per day and continues to target nearly 1.1 million barrels of oil equivalent per day by the end of 2028. Sunrise and West White Rose provide additional project support.

CVE's Refining Rebound Broadens Earnings StrengthDownstream operating margin improved to C$953 million from a C$71 million loss a year earlier. U.S. Refining generated C$771 million of operating margin against a C$178 million loss, while downstream crude utilization reached 95%.

That recovery shows the value of Cenovus' integrated model when refining conditions are favorable. Suncor Energy Inc. (SU - Free Report) , another large Canadian integrated producer, reported second-quarter 2026 refinery throughput of 470.6 thousand barrels per day and 92% utilization. Imperial Oil Limited (IMO - Free Report) also spans upstream and downstream operations, though planned turnaround activity held its second-quarter refinery utilization to 76%.

CVE's Estimate Revisions Add Another Positive SignalThe Zacks Consensus Estimate for 2026 earnings has increased 6% over the past four weeks and 6.3% over the past 12 weeks. Rising estimates are supportive because earnings revisions are central to Zacks' short-term rating methodology.

The earnings path is not uniformly higher. The consensus estimate calls for earnings of $3.20 per share in 2026 and $2.76 in 2027, indicating moderation after this year's expected increase. That makes continued operating execution important if the stock is to extend its recent run.

Image Source: Zacks Investment Research

Cenovus Valuation Leaves Less Room for ErrorCenovus trades at 1.6X forward 12-month sales, matching the high end of its five-year range and standing well above the five-year median of 0.8X. The multiple is below the Zacks sub-industry's 1.8X but above the broader energy sector's 1.4X.

Image Source: Zacks Investment Research

That valuation does not eliminate upside, but it raises the bar. Commodity-price sensitivity, heavy-oil differentials and downstream margin volatility remain relevant, while net debt of C$5.4 billion at June 30 was still above the company's C$4.0 billion long-term target.

CVE's Ratings Favor Quality Over a ChaseCenovus has several operating supports behind the rally, but the stock's fuller valuation and expected 2027 earnings moderation argue against treating recent momentum as a one-way signal. The setup looks balanced rather than decisively bullish.

CVE currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

It also has a Value Score of A, Growth Score of A, Momentum Score of B and VGM Score of A. Those Style Scores point to favorable value, growth and momentum characteristics, but they are designed to complement the Zacks Rank rather than override it. For now, the combination favors a measured stance while investors watch whether execution keeps pace with the higher valuation.

CALGARY, Alberta, July 29, 2026 (GLOBE NEWSWIRE) -- Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) today announced its second-quarter 2026 financial and operating results. In the quarter, the company generated approximately $5.0 billion of adjusted funds flow and $3.8 billion of free funds flow. Operating results in the quarter included Upstream production of 970.4 thousand barrels of oil equivalent per day (MBOE/d)1 and Downstream crude throughput of 451.5 thousand barrels per day (Mbbls/d), representing an overall crude unit utilization rate of 95%.

Highlights

Delivered Upstream production of 970.4 MBOE/d, an increase of over 200 MBOE/d from Q2 2025.Record quarterly Oil Sands production of 786.4 MBOE/d, including record quarterly production at Christina Lake and Sunrise.Operated at a 95% crude unit utilization rate in the Downstream, with total crude throughput of 451.5 Mbbls/d and U.S. Refining adjusted market capture of 67%2.Increased full-year 2026 production guidance by 25 MBOE/d and decreased Oil Sands operating cost guidance by approximately 6%, as a result of strong performance across the Oil Sands assets and optimization of turnaround activity. Capital investment guidance is unchanged.Returned $1.4 billion to shareholders in the second quarter, including $1.0 billion through common share repurchases and $0.4 billion through common share dividends. “Through disciplined execution across the Upstream and Downstream, our people delivered outstanding operating performance and our best-ever quarterly financial results,” said Jon McKenzie, Cenovus President & Chief Executive Officer. “We are advancing toward sustained production of one million BOE per day, a milestone that underscores our consistent execution, the ingenuity of our staff and our strong commitment to safety.”

Financial summary 

($ millions, except per share amounts)2026 Q22026 Q12025 Q2Cash from (used in) operating activities5,6362,1812,374Adjusted funds flow24,9863,3771,519Per share (diluted)22.661.800.84Capital investment1,2001,1701,164Free funds flow23,7862,207355Excess free funds flow23,2571,723(306)Net earnings (loss)2,8701,570851Per share (diluted)1.530.830.45Long-term debt, including current portion8,55810,6337,241Net debt5,3888,0584,934     Production and throughput

(before royalties, net to Cenovus)2026 Q22026 Q12025 Q2Oil and NGLs (Mbbls/d)1835.5830.1624.0Conventional natural gas (MMcf/d)1809.8852.0851.4Total Upstream production (MBOE/d)1970.4972.1765.9Total Downstream crude throughput (Mbbls/d)1451.5458.5665.8 1 See Advisory for production by product type and by reporting segment.
2 Non-GAAP financial measure or contains a non-GAAP financial measure. See Advisory.

Second-quarter results

Operating1

Cenovus’s total revenues were $17.4 billion in the second quarter, up from $12.4 billion in the first quarter of 2026. Upstream revenues were $12.6 billion, an increase from $9.4 billion in the previous quarter, while Downstream revenues were $8.2 billion, an increase from $5.6 billion in the first quarter.

Operating margin3 was $5.9 billion, compared with $4.4 billion in the prior quarter. Upstream operating margin4 was $4.9 billion, up from $3.7 billion in the prior quarter, as a result of higher benchmark oil prices and strong cost discipline. Downstream operating margin4 was $953 million, an increase from $734 million in the prior quarter, reflecting strong market crack spreads and upgrading differentials. Operating margin in the U.S. Refining segment was $771 million, which included a $152 million inventory holding gain.

Total Upstream production was 970.4 MBOE/d, compared to 972.1 MBOE/d in the first quarter. Christina Lake production was 372.1 Mbbls/d, up from 358.9 Mbbls/d in the prior quarter as a result of strong well pad performance at Narrows Lake and continued progress on the redevelopment well program at Christina Lake North. Foster Creek production was 214.5 Mbbls/d, down from 223.0 Mbbls/d in the prior quarter as a result of an unplanned disruption in late May. Sunrise production was 65.7 Mbbls/d, up from 59.4 Mbbls/d in the prior quarter as a result of the strong ramp-up from the first well pad in the East development area.

Production from the Lloydminster thermal assets was 103.1 Mbbls/d, compared with 102.3 Mbbls/d in the first quarter. Lloydminster conventional heavy oil output was 28.4 Mbbls/d, compared with 29.0 Mbbls/d in the prior quarter.

Production in the Conventional segment was 118.2 MBOE/d, a decrease from 121.7 MBOE/d in the prior quarter, largely as a result of third-party maintenance.

In the Offshore segment, production was 65.8 MBOE/d compared with 75.4 MBOE/d in the first quarter. In Asia Pacific, production was 51.2 MBOE/d, compared with 57.1 MBOE/d in the prior quarter due to planned maintenance in China and Indonesia. In the Atlantic region, production was 14.6 Mbbls/d, down from 18.3 Mbbls/d in the prior quarter as a result of turnaround activities at Terra Nova.

Cenovus is on track to achieve an Upstream monthly production milestone in excess of one million BOE/d in the month of July.

Total Downstream crude throughput in the second quarter was 451.5 Mbbls/d. Crude throughput in Canadian Refining was 101.7 Mbbls/d, representing a utilization rate of 94%, compared with 115.3 Mbbls/d in the prior quarter, as a result of a turnaround at the Lloydminster Upgrader.

In U.S. Refining, crude throughput was 349.8 Mbbls/d, compared with 343.2 Mbbls/d in the first quarter, representing a crude unit utilization rate of 96%. U.S. Refining revenues were $6.5 billion, an increase from $4.2 billion in the prior quarter, reflecting higher refined product prices. Adjusted market capture in U.S. Refining was 67%, compared with 114% in the prior quarter, a result of expected seasonal refined product pricing impacts as well as elevated domestic light crude pricing.

3Non-GAAP financial measure. Operating margin is the total of Upstream operating margin plus Downstream operating margin. See Advisory.
4Specified financial measure. See Advisory.

Financial

Cash from operating activities in the second quarter increased to $5.6 billion from $2.2 billion in the first quarter. Adjusted funds flow was $5.0 billion, compared with $3.4 billion in the prior quarter, and free funds flow was $3.8 billion, compared with $2.2 billion in the prior quarter, driven by higher commodity prices and strong operational performance. Net earnings increased to $2.9 billion from $1.6 billion in the prior quarter.

Long-term debt, including the current portion, was $8.6 billion as at June 30, 2026. During the quarter, the remaining $2.2 billion outstanding on the term loan facility obtained to fund a portion of the cash consideration for the MEG Energy Corp. acquisition was fully repaid and subsequently cancelled. Net debt was $5.4 billion as at June 30, 2026, a decrease of $2.7 billion from the prior quarter, as a result of strong financial results and a $0.7 billion decrease in non-cash working capital.

In the second quarter, the company achieved its interim net debt threshold of $6 billion. While net debt is between $6.0 billion and $4.0 billion, the company will target to return approximately 75% of excess free funds flow to shareholders over time. The company continues to steward toward a long-term net debt target of $4.0 billion.

Growth projects

At Christina Lake North, the facility expansion project continues to progress, and the first of two new steam generators is expected to be brought online by year-end. In addition, the redevelopment well program is proceeding to plan and production is expected to increase in the second half of 2026. At Foster Creek, the enhanced sulphur recovery project, which is expected to reduce operating costs by $0.50 to $0.75 per barrel, was successfully completed and brought online within the quarter. Cenovus’s first commercial diluent solvent aided process project was sanctioned in the first quarter of 2026 with fabrication and earthworks underway in Q2. The project is expected to add 5 to 10 Mbbls/d of production by 2028.

At West White Rose, drilling of the first well continues to progress and the project remains on track for first oil in late Q3.

2026 guidance update

Cenovus has revised its 2026 corporate guidance to reflect the company’s updated outlook for the remainder of the year. It is available on cenovus.com under Investors.

Changes to the company’s 2026 guidance include:

Total upstream production raised to a range of 970 MBOE/d to 1,010 MBOE/d, an increase of 25 MBOE/d. This includes the impacts of strong performance in the Oil Sands and optimization of turnaround activity at Foster Creek and Christina Lake.Decreased overall Upstream operating cost guidance, including reductions to Oil Sands, Conventional and Asia Pacific as a result of higher production and lower costs. Revised operating cost guidance ranges are as follows: Oil Sands operating costs per BOE: From $11.25 - $12.75 to $10.75 - $11.75Conventional operating costs per BOE: From $11.00 - $12.00 to $10.00 - $10.50Asia Pacific operating costs per BOE: From $10.00 - $11.00 to $9.50 - $10.00Atlantic operating costs per bbl: From $35.00 - $45.00 to $40.00 - $45.00 Canadian Refining throughput raised to a range of 110 Mbbls/d to 115 Mbbls/d, an increase of 5 Mbbls/d at the midpoint, and Canadian Refining per-unit operating expenses decreased to a range of $10.50/bbl to $11.50/bbl, reflecting strong year-to-date performance. The company has also updated its commodity price assumptions and guidance range for cash taxes. There has been no change to the expected capital investment range of $5.0 billion to $5.3 billion.

Dividend declarations and share purchases

The Board of Directors has declared a quarterly base dividend of $0.22 per common share, payable on September 29, 2026, to shareholders of record as of September 15, 2026.

All dividends paid on Cenovus’s common shares will be designated as “eligible dividends” for Canadian income tax purposes. Declaration of dividends is at the sole discretion of the Board and will continue to be evaluated on a quarterly basis.

In the second quarter, the company returned $1.4 billion to shareholders, composed of $1.0 billion from its purchase of 26.2 million common shares through its normal course issuer bid and $0.4 billion through common share dividends.

2026 planned maintenance

The following table provides details on planned maintenance activities at Cenovus assets in 2026 and anticipated production or throughput impacts.

Potential quarterly production/throughput impact (MBOE/d or Mbbls/d)

(MBOE/d or Mbbls/d)Q3Q4Annual impactUpstreamOil Sands17 - 21-4 - 6Offshore---Conventional---DownstreamCanadian Refining--2 - 4U.S. Refining35 - 4540 - 5020 - 26     Conference call today

Cenovus will host a conference call today, July 29, 2026, at 9 a.m. MT (11 a.m. ET).

To participate in the conference call, please register in advance of the call start time. Once registered, you will receive a unique PIN that can be used to access the call by phone. You can either dial into the conference call using the unique PIN or select the "Call Me" option to receive an automated call.

A live audio webcast of the conference call will be available and will remain archived for approximately 30 days.

Advisory

Basis of Presentation

Cenovus reports financial results in Canadian dollars and presents production volumes on a net to Cenovus before royalties basis, unless otherwise stated. Cenovus prepares its financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (the IFRS Accounting Standards).

Barrels of Oil Equivalent

Natural gas volumes have been converted to BOE on the basis of six thousand cubic feet (Mcf) to one barrel (bbl). BOE may be misleading, particularly if used in isolation. A conversion ratio of one bbl to six Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil compared with natural gas is significantly different from the energy equivalency conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is not an accurate reflection of value.

Product types

Product type by reporting segmentThree months ended
June 30, 2026Oil SandsBitumen (Mbbls/d)755.4Heavy crude oil (Mbbls/d)28.4Conventional natural gas (MMcf/d)15.6Total Oil Sands segment production (MBOE/d)786.4ConventionalLight crude oil (Mbbls/d)6.7Natural gas liquids (Mbbls/d)22.2Conventional natural gas (MMcf/d)535.9Total Conventional segment production (MBOE/d)118.2OffshoreLight crude oil (Mbbls/d)14.6Natural gas liquids (Mbbls/d)8.2Conventional natural gas (MMcf/d)258.3Total Offshore segment production (MBOE/d)65.8Total Upstream production (MBOE/d)970.4   Forward‐looking Information

This news release contains certain forward‐looking statements and forward‐looking information (collectively referred to as “forward‐looking information”) within the meaning of applicable securities legislation about Cenovus’s current expectations, estimates and projections about the future of the company, based on certain assumptions made in light of the company’s experiences and perceptions of historical trends. Although Cenovus believes that the expectations represented by such forward‐looking information are reasonable, there can be no assurance that such expectations will prove to be correct. Forward‐looking information in this document is identified by words such as “anticipate”, “continue”, “deliver”, “drive”, “expect”, “on track”, “payable”, “progress”, “remain”, “steward”, “target”, and “will” or similar expressions and includes suggestions of future outcomes, including, but not limited to, statements about: advancing towards sustained production milestone of one million BOE/d; commitment to safety; achieving an Upstream monthly production milestone in excess of one million BOE/d in the month of July; targeting to return approximately 75% of EFFF to shareholders over time; stewarding towards our long-term net debt target; Christina Lake North facility expansion project and redevelopment well program progress; expectation of operating cost reduction at Foster Creek; continued development of the eastern area and bringing a second pad online in the third quarter at Sunrise; additional production expected by 2028 from the diluent solvent aided process project; timing of first oil from the West White Rose project; future dividend payments; and 2026 planned maintenance and production/throughput impacts.

Developing forward‐looking information involves reliance on a number of assumptions and consideration of certain risks and uncertainties, some of which are specific to Cenovus and others that apply to the industry generally. The factors or assumptions on which the forward‐looking information in this news release are based include, but are not limited to the assumptions inherent in Cenovus’s updated 2026 corporate guidance available on cenovus.com.

The risk factors and uncertainties that could cause actual results to differ materially from the forward‐looking information in this news release include, but are not limited to: changes to general economic, market and business conditions; the accuracy of estimates regarding commodity production and operating expenses, inflation, taxes, royalties, capital costs and currency and interest rates; risks inherent in the operation of Cenovus’s business; and risks associated with climate change and Cenovus’s assumptions relating thereto and other risks identified under “Risk Management and Risk Factors” and “Advisory” in Cenovus’s Management’s Discussion and Analysis (MD&A) for the year ended December 31, 2025.

Except as required by applicable securities laws, Cenovus disclaims any intention or obligation to publicly update or revise any forward‐looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned that the foregoing lists are not exhaustive and are made as at the date hereof. Events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, the forward‐looking information. For additional information regarding Cenovus’s material risk factors, the assumptions made, and risks and uncertainties which could cause actual results to differ from the anticipated results, refer to “Risk Management and Risk Factors” and “Advisory” in Cenovus’s MD&A for the periods ended December 31, 2025 and June 30, 2026 and to the risk factors, assumptions and uncertainties described in other documents Cenovus files from time to time with securities regulatory authorities in Canada (available on SEDAR+ at sedarplus.ca, on EDGAR at sec.gov and Cenovus’s website at cenovus.com).

Specified Financial Measures

This news release contains references to certain specified financial measures that do not have standardized meanings prescribed by IFRS Accounting Standards. Readers should not consider these measures in isolation or as a substitute for analysis of the company’s results as reported under IFRS Accounting Standards. These measures are defined differently by different companies and, therefore, might not be comparable to similar measures presented by other issuers. For information on the composition of these measures, as well as an explanation of how the company uses these measures, refer to the Specified Financial Measures Advisory located in Cenovus’s MD&A for the periods ended December 31, 2025 and June 30, 2026 (available on SEDAR+ at sedarplus.ca, on EDGAR at sec.gov and on Cenovus's website at cenovus.com), which is incorporated by reference into this news release.

Upstream Operating Margin and Downstream Operating Margin

Upstream Operating Margin and Downstream Operating Margin, and the individual components thereof, are included in Note 1 of the interim Consolidated Financial Statements.

Operating Margin

Operating Margin is the total of Upstream Operating Margin plus Downstream Operating Margin.

 Upstream (5)Downstream (5)Total ($ millions)2026
Q22026
Q12025
Q22026
Q22026
Q12025
Q22026
Q22026
Q12025
Q2 Revenues Gross Sales14,23110,3707,3948,1575,6277,74322,38815,99715,137 Less: Royalties(1,661)(983)(621)———(1,661)(983)(621) 12,5709,3876,7738,1575,6277,74320,72715,01414,516 Expenses Purchased Product2,0741,2441,1116,6634,3786,8788,7375,6227,989 Transportation and Blending4,5823,3752,621———4,5823,3752,621 Operating9711,0478965055269471,4761,5731,843 Realized (Gain) Loss on Risk Management2813836(11)(11)642(3) Operating Margin4,9153,7082,137953734(71)5,8684,4422,066 5 Found in Note 1 of the June 30, 2026, or the March 31, 2026, interim Consolidated Financial Statements.

Adjusted Funds Flow, Free Funds Flow and Excess Free Funds Flow (EFFF)

The following table provides a reconciliation of cash from (used in) operating activities found in Cenovus’s interim Consolidated Financial Statements to Adjusted Funds Flow, Free Funds Flow and EFFF. Adjusted Funds Flow per Share – Basic and Adjusted Funds Flow per Share – Diluted are calculated by dividing Adjusted Funds Flow by the respective basic or diluted weighted average number of common shares outstanding during the period and may be useful to evaluate a company’s ability to generate cash.

 Three Months Ended ($ millions)June 30, 2026March 31, 2026June 30, 2025 Cash From (Used in) Operating Activities(6)5,6362,1812,374 (Add) Deduct:    Settlement of Decommissioning Liabilities(39)(53)(68) Net Change in Non-Cash Working Capital689(1,143)923 Adjusted Funds Flow4,9863,3771,519 Capital Investment1,2001,1701,164 Free Funds Flow3,7862,207355 Add (Deduct):    Base Dividends Paid on Common Shares(411)(377)(364) Purchase of Common Shares under Employee Benefit Plan(58)(51)(15) Dividends Paid on Preferred Shares—(2)(4) Settlement of Decommissioning Liabilities(39)(53)(68) Principal Repayment of Leases(88)(90)(94) Acquisitions, Net of Cash Acquired(5)(10)(129) Proceeds From Divestitures729913 Excess Free Funds Flow3,2571,723(306) 6 Found in the June 30, 2026, or the March 31, 2026, interim Consolidated Financial Statements.

Adjusted Market Capture

Adjusted market capture contains a non-GAAP financial measure and is used in the company’s U.S. Refining segment to provide an indication of margin captured relative to what was available in the market based on widely-used benchmarks. Cenovus defines adjusted market capture as refining margin, net of holding gains and losses, divided by the weighted average 3-2-1 market benchmark crack, net of RINs, expressed as a percentage. The weighted average crack spread, net of RINs, is calculated on Cenovus’s operable capacity-weighted average of the Chicago and Group 3 3-2-1 benchmark market crack spreads, net of RINs.

 ($ millions)Three months ended
June 30, 2026Three months ended
March 31, 2026 Revenues (7)6,5494,220 Purchased Product (7)5,3843,318 Gross Margin1,165902 Inventory Holding (Gain) Loss(152)(457) Adjusted Gross Margin1,013445 Total Processed Inputs (Mbbls/d)372.9359.9 Adjusted Refining Margin ($/bbl)29.8313.74 Operable Capacity (Mbbls/d)364.8364.8 Operable Capacity by Regional Benchmark (percent) Chicago 3-2-1 Crack Spread Weighting8888 Group 3 3-2-1 Crack Spread Weighting1212 Benchmark Prices and Exchange Rate Chicago 3-2-1 Crack Spread (US$/bbl)46.5417.55 Group 3 3-2-1 Crack Spread (US$/bbl)41.4517.16 RINs (US$/bbl)13.788.71 US$ per C$1 - Average0.7230.729 Weighted Average Crack Spread, Net of RINs ($/bbl)44.4612.06 Adjusted Market Capture (percent)67114 7 Found in Note 1 of the June 30, 2026, or the March 31, 2026, interim Consolidated Financial Statements.

Cenovus Energy Inc.

Cenovus Energy Inc. is an integrated energy company with oil and natural gas production operations in Canada and the Asia Pacific region, and upgrading, refining and marketing operations in Canada and the United States. The company is committed to maximizing value by developing its assets in a safe, responsible and cost-efficient manner, integrating sustainability considerations into its business plans. Cenovus common shares are listed on the Toronto and New York stock exchanges. For more information, visit cenovus.com.

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Key Takeaways Cenovus shares surged 85.3% in the past year, beating CNQ, SU and the sub-industry's 52.9% rallies.Cenovus expects to beat its C$150M 2026 MEG synergy target and generate above C$400M annually by 2028.Cenovus trades at 6.6X EV/EBITDA, below the industry average and Canadian Natural Resources' 9.08X. Over the past year, shares of Cenovus Energy Inc. (CVE - Free Report) have climbed 85.3%, comfortably outpacing Canadian Natural Resources' (CNQ - Free Report) 33.5% gain and Suncor Energy's (SU - Free Report) 49.9% rally. During the same period, the stock has surpassed the sub-industry’s 52.9% return. The strong stock performance reflects growing investor confidence in the company's execution strategy and expanding operational footprint within Canada's energy sector.

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Cenovus has steadily strengthened its business through disciplined capital allocation, acquisitions and production growth. As the stock continues to outperform, investors are evaluating whether the company's improving fundamentals can support further upside.

Adding to the bullish case, Cenovus has exceeded the Zacks Consensus Estimate in the past four quarters, delivering an average earnings surprise of 50.8%. Such consistent earnings outperformance highlights the company's operational strength despite the cyclical nature of the energy industry.

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Key Factors Driving Cenovus' Growth StoryMEG Energy Acquisition Is Already Delivering ResultsThe acquisition of MEG Energy, completed in late 2025 for C$7.1 billion, has quickly become a major value driver for Cenovus. The transaction expanded the company's oil sands portfolio by adding assets adjacent to its Christina Lake operations, creating opportunities for operational efficiencies and lower development costs.

Management has indicated that redevelopment wells at Christina Lake North are performing better than originally anticipated. Consequently, the company expects to exceed its initial C$150-million synergy target for 2026, while maintaining its outlook of generating more than C$400 million in annual synergies by 2028.

Beyond near-term cost savings, the acquisition strengthens Cenovus' reserve base, enhances production capacity and further reinforces its leadership position among Canada's oil sand producers.

Low-Cost Operations Provide a Durable Competitive AdvantageOne of Cenovus' biggest strengths remains its industry-leading cost structure. According to the company, combined operating and sustaining capital costs are approximately $21 per barrel, making Cenovus one of the lowest-cost producers in its peer group.

Its portfolio of long-life, high-quality oil sands assets enables the company to generate attractive returns across commodity price cycles. Management has also maintained a disciplined capital allocation strategy, with growth projects designed to earn acceptable returns even if WTI crude falls to around US$45 per barrel.

This structural cost advantage positions Cenovus to protect margins, generate healthy free cash flow and continue to create long-term shareholder value even in weaker commodity environments.

Integrated Operations Enhance Cash Flow StabilityWhile crude oil prices remain supportive, the longer-term outlook points to a more balanced global oil market as OPEC+ gradually restores production, geopolitical supply disruptions ease and inventories rebuild. According to the U.S. Energy Information Administration (EIA), Brent crude prices are expected to average $82 per barrel in 2026 before moderating in 2027 as higher global supply weighs on the market.

Against this backdrop, Cenovus appears well-positioned to generate resilient cash flows. The company's upstream portfolio is anchored by long-life oil sand assets with combined operating and sustaining capital costs of approximately $21 per barrel, while management expects its growth investments to generate acceptable returns even at WTI prices of US$45 per barrel. This low-cost production profile provides a meaningful cushion against weaker commodity prices.

Cenovus' integrated business model strengthens its earnings resilience. The company owns approximately 660,000 barrels per day of refining capacity across North America through refineries in Canada and the United States. This downstream business helps offset volatility in upstream earnings by capturing refining margins when crude price realizations weaken. In addition, its extensive pipeline connectivity and heavy-oil processing capabilities help reduce the impact of Western Canadian Select (WCS) price differentials.

The combination of low-cost upstream operations and a sizable downstream refining network enables Cenovus to generate relatively stable free cash flow across commodity cycles, supporting continued shareholder returns, disciplined capital allocation and long-term production growth.

Estimates Reflect Continued Earnings GrowthAnalyst sentiment has become increasingly constructive toward Cenovus in recent months. The Zacks Consensus Estimate for 2026 revenues stands at $37.6 billion, implying 5.8% year-over-year growth, while earnings are projected to reach $3.02 per share, representing an impressive 96% increase from the prior year.

For 2027, consensus estimates call for an additional 1.5% increase in revenues, although earnings are expected to decline 8.2%.

Reflecting improved confidence in the company's outlook, earnings estimates have also moved higher. Over the past 60 days, the consensus EPS estimate has increased 2.03% for 2026 and 6.13% for 2027.

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Attractive Valuation Compared With PeersDespite its strong share price appreciation, Cenovus continues to trade at a reasonable valuation. The stock currently carries a trailing 12-month EV/EBITDA multiple of 6.6X, slightly below the industry average of 6.65X.

The valuation also remains well below Canadian Natural Resources, which trades at 9.08X EV/EBITDA. Although Suncor Energy commands a similar multiple, Cenovus offers a more compelling long-term growth profile, supported by acquisition synergies, low-cost operations and multiple development opportunities that should drive production growth.

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Should You Buy CVE Stock?Cenovus has built a compelling long-term investment case by combining disciplined execution with growth initiatives. The successful integration of the MEG Energy acquisition, one of the industry's lowest operating cost structures and a highly integrated upstream-downstream business model, positions the company to generate resilient earnings across varying commodity price environments.

At the same time, improving earnings estimates indicate growing confidence in management's ability to translate these operational strengths into higher profitability. Despite its strong rally over the past year, the stock continues to trade at an attractive valuation relative to the broader industry and several key competitors.

Backed by a Zacks Rank #1 (Strong Buy), Cenovus appears well-positioned to deliver sustainable shareholder value over the long term, making the stock an attractive consideration for investors seeking exposure to a financially disciplined and operationally efficient Canadian energy producer.

You can see the complete list of today’s Zacks #1 Rank stocks here.