April 10, 2019 / 11:15 AM / 2 months ago

BUZZ-Cenovus Energy: CS expects narrow heavy-light differential to favor Q1, raises PT

** Credit Suisse raises PT of Canadian oil and gas producer to C$17 from C$15; maintains “outperform” rating

** Brokerage expects Q1 oil sands operating income of C$783 mln ($587.6 mln) vs loss of C$178 mln in Q4; says narrow differential between U.S. crude and Canadian heavy oil will strongly work in CVE’s favor in Q1 vs major headwind in Q4

** CS estimates CVE’s net debt to drop to ~C$6.6 bln by 2019 end and below ~C$5 bln by 2020 year end; total debt was $8.4 bln as of Feb. 13

** Expects Q1 cash flow/shr to rise to 68 Canadian cents from 59 Canadian cents vs est. 55 Canadian cents

** Expects refining and marketing operating income of C$180 mln in Q1 vs C$251 mln in Q4

** Expects Deep Basin operating income of C$76 mln in Q1 2019 vs C$62 mln in Q4, says higher liquids pricing will offset lower quarter-over-quarter volumes

** 14 of 25 brokerages rate the stock “buy” or higher, 11 “hold”; their median PT is C$13.50

** CVE shares have climbed 33 pct so far this year ($1 = 1.3326 Canadian dollars) (Reporting by Shradha Singh in Bengaluru)

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