Is Cenovus Energy (TSX:CVE) Still Attractive After Its Recent 22% One Year Share Price Gain

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If you are wondering whether Cenovus Energy still offers good value after its recent run, or if the easy gains have already been realized, this article walks through what the current price might be implying.

The stock is at a last close of C$25.15, with returns of 10.8% over 7 days, 8.6% over 30 days, 4.6% year to date and 22.1% over the past year. This naturally raises questions about whether the current price still lines up with fundamentals.

Recent coverage has focused on Cenovus Energy as a large Canadian energy producer, with ongoing attention on its role in the broader oil and gas sector and how energy prices feed into investor sentiment. That backdrop helps explain why the stock’s recent returns are in focus for many investors looking at the sector.

Cenovus Energy currently scores 5/6 on our valuation checks. This sets us up to compare different valuation methods next and, toward the end of this article, consider a broader way to think about what the market is pricing in.

Cenovus Energy delivered 22.1% returns over the last year. See how this stacks up to the rest of the Oil and Gas industry.

A Discounted Cash Flow, or DCF, model estimates what a company might be worth by projecting its future cash flows and then discounting those back to today in CA$ terms.

For Cenovus Energy, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is about CA$3.27b. Analyst estimates and subsequent extrapolations suggest free cash flow could reach CA$6.39b in 2035, with interim projections such as CA$3.52b in 2026, CA$4.79b in 2027 and CA$5.06b in 2028. Estimates beyond the analyst horizon are extrapolated by Simply Wall St, rather than coming directly from analyst models.

When all these projected cash flows are discounted back, the model arrives at an estimated intrinsic value of CA$77.63 per share. Compared with a recent share price of about CA$25.15, this implies the stock is 67.6% undervalued on this DCF view.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Cenovus Energy is undervalued by 67.6%. Track this in your watchlist or portfolio, or discover 867 more undervalued stocks based on cash flows.

CVE Discounted Cash Flow as at Jan 2026

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Cenovus Energy.

For a profitable company like Cenovus Energy, the P/E ratio is a useful way to think about what you are paying for each dollar of earnings. It connects directly to how the market weighs current profitability against expectations for future performance and the risks around those earnings.

Story Continues

Higher growth expectations or lower perceived risk usually justify a higher P/E, while slower growth or higher risk tend to line up with a lower P/E. Cenovus Energy is currently trading on a P/E of 15.20x. That sits close to both the Oil and Gas industry average P/E of 15.44x and the broader peer group average of 17.89x, suggesting the market is pricing Cenovus in a similar range to comparable companies.

Simply Wall St’s Fair Ratio for Cenovus is 17.68x. This is a proprietary estimate of what the P/E might be based on factors like earnings growth, profit margins, industry, market cap and company specific risks. Because it combines these elements, it can provide a more tailored anchor than a simple comparison with peers or the sector. With the current P/E of 15.20x sitting below the Fair Ratio of 17.68x, this measure indicates the shares are undervalued on this metric.

Result: UNDERVALUED

TSX:CVE P/E Ratio as at Jan 2026

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1439 companies where insiders are betting big on explosive growth.

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, which are simply your own story about a company that ties together what you think its future revenue, earnings and margins could be, what that implies for fair value, and how that compares with the current price. Narratives are available in an easy tool on Simply Wall St’s Community page that updates as new news or earnings arrive. For Cenovus Energy, one investor might build a Narrative that leans toward the higher analyst fair value markers in the C$30 to C$32 range because they expect MEG integration and buybacks to support future cash returns, while another might anchor closer to the lower C$21 analyst target because they are more focused on risks like regulatory uncertainty or energy transition. By setting up your own Cenovus Narrative alongside others, you can quickly see whether your fair value is above or below the current share price and decide for yourself if the stock looks closer to an opportunity or something to avoid for now.

Do you think there’s more to the story for Cenovus Energy? Head over to our Community to see what others are saying!

TSX:CVE 1-Year Stock Price Chart

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include CVE.TO.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Is Cenovus Energy (TSX:CVE) Still Attractive After Its Recent 22% One Year Share Price Gain

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