With the Bank of Canada set to make its next interest rate decision on October 28, investors are closely monitoring inflation and labour market data to gauge potential monetary policy shifts. In this climate of economic uncertainty, identifying stocks that may be trading at a discount can offer valuable opportunities for investors seeking value in the Canadian market.

Top 5 Undervalued Stocks Based On Cash Flows In Canada

Click here to see the full list of 7 stocks from our Undervalued TSX Stocks Based On Cash Flows screener.

Let's dive into some prime choices out of the screener.

Cenovus Energy (TSX:CVE)

Overview: Cenovus Energy Inc. is an integrated energy company that develops, produces, refines, transports, and markets crude oil, natural gas, and refined petroleum products across Canada, the United States, and China with a market cap of CA$84.45 billion.

Operations: The company's revenue segments consist of CA$1.70 billion from Upstream - Offshore, CA$31.55 billion from Upstream - Oil Sands, CA$3.03 billion from Upstream - Conventional, CA$22.01 billion from Downstream - U.S. Refining, and CA$5.52 billion from Downstream - Canadian Refining.

Estimated Discount To Fair Value: 49.8%

Cenovus Energy is trading at CA$46.21, significantly below its estimated future cash flow value of CA$92.13, suggesting it may be undervalued based on discounted cash flow analysis. Despite declining revenue and earnings forecasts over the next three years, recent results show strong net income growth to CA$2.87 billion in Q2 2026 from CA$851 million a year ago. The company has also repurchased shares worth CAD 1,789.78 million under its buyback program.

• Our expertly prepared growth report on Cenovus Energy implies its future financial outlook may be stronger than recent results.
• Click here and access our complete balance sheet health report to understand the dynamics of Cenovus Energy.

OceanaGold (TSX:OGC)

Overview: OceanaGold Corporation is involved in the exploration, development, and operation of gold and gold/copper mines across the United States, the Philippines, and New Zealand with a market cap of approximately CA$9.28 billion.

Operations: The company's revenue is derived from its mining operations, with Haile contributing $795.80 million, Waihi $337.80 million, Didipio $548.60 million, and Macraes $780.50 million.

Estimated Discount To Fair Value: 30.4%

OceanaGold is trading at CA$42.93, well below its estimated future cash flow value of CA$61.65, highlighting potential undervaluation based on discounted cash flow analysis. The company reported robust earnings growth with net income rising to US$222.2 million in Q2 2026 from US$114.1 million a year earlier, despite forecasts of slower revenue growth compared to the Canadian market. Recent initiatives include an application for extending the Macraes mine life and a share buyback program underway.

• Insights from our recent growth report point to a promising forecast for OceanaGold's business outlook.
• Click to explore a detailed breakdown of our findings in OceanaGold's balance sheet health report.

Suncor Energy (TSX:SU)

Overview: Suncor Energy Inc. is an integrated energy company with operations in Canada, the United States, and internationally, and it has a market cap of approximately CA$109.61 billion.

Operations: The company's revenue is primarily derived from three segments: Oil Sands (CA$26.87 billion), Refining and Marketing (CA$36.75 billion), and Exploration and Production (CA$2.50 billion).

Estimated Discount To Fair Value: 42.9%

Suncor Energy is trading at CA$95.29, significantly below its estimated future cash flow value of CA$166.93, suggesting undervaluation based on discounted cash flow analysis. Despite a 57.7% increase in earnings over the past year, revenue and earnings are forecasted to decline by 2.7% and 8% annually over the next three years, respectively. Recent executive changes aim to bolster operational excellence with Peter Zebedee set to assume key leadership roles by 2027 amidst ongoing share buybacks totaling CA$1.68 billion.

• The analysis detailed in our Suncor Energy growth report hints at robust future financial performance.
• Navigate through the intricacies of Suncor Energy with our comprehensive financial health report here.

Taking Advantage

• Click here to access our complete index of 7 Undervalued TSX Stocks Based On Cash Flows.
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Curious About Other Options?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
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• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

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.