2 Energy Stocks to Play Both Sides of Tariff Uncertainty

Group 1: Tariff Impact on Energy Sector - President Trump's 25% import tariffs on Mexico and Canada, along with a 10% tariff on China, are prompting investors to seek shelter from potential fallout, particularly concerning Canadian energy supplies [1] - The United States imports a significant amount of crude oil from Canada, with a third of its crude oil also coming from Mexico; without energy imports, the U.S. would have a trade surplus with Canada [2][4] - The fear of import tariffs has driven a 36.8% drop in Cenovus Energy Inc.'s stock, which is down 8.65% year-to-date as of February 28, 2025 [2] Group 2: Cenovus Energy Overview - Cenovus Energy is one of Canada's largest heavy crude oil producers, with its heavy crude oil from Alberta oil sands being ideal for U.S. refineries [3] - Cenovus has established pipelines transporting heavy crude oil to the Midwest, making it a key supplier for U.S. refineries that rely on Canadian oil [6] - Cenovus has a 50% ownership stake in two refineries in the Midwest, which produce various petroleum products and are strategically located for distribution [7][8] Group 3: Financial Performance and Forecast - Cenovus reported Q4 2024 earnings per share (EPS) of 5 cents, missing analyst estimates by 12 cents, while upstream production rose 1% year-over-year [10] - The company achieved record quarterly and annual oil sands production rates, with downstream refining performance improving significantly [11] - Cenovus's stock forecast indicates a potential upside of 138.68%, with a 12-month price target of $29.25 based on analyst ratings [9] Group 4: Alternative Energy Investment - NRG Energy is highlighted as a major independent power producer in the U.S., generating 23 gigawatts and benefiting from a surge in demand due to the AI and data center boom [13][14] - NRG Energy's stock forecast shows a potential upside of 22.98$123.29 [15] - The company reaffirmed its 2025 guidance, forecasting adjusted EPS of $7.25 and adjusted EBITDA of$3.85 billion, indicating strong financial health [16]