Key Considerations Before Investing in Canadian Natural Resources (CNQ)

Now trading at a price of $70.35, Canadian Natural Resources has moved -2.0% so far today.

Canadian Natural Resources returned gains of 27.8% last year, with its stock price reaching a high of $82.58 and a low of $52.66. Over the same period, the stock outperformed the S&P 500 index by 4.6%. More recently, the company's 50-day average price was $76.77. Canadian Natural Resources Limited acquires, explores for, develops, produces, markets, and sells crude oil, natural gas, and natural gas liquids (NGLs). Based in Calgary, Canada, the Large-Cap Energy company has 10,272 full time employees. Canadian Natural Resources has offered a 5.4% dividend yield over the last 12 months.

Exceptional EPS Growth but Not Enough Current Assets to Cover Current Liabilities:

2018 2019 2020 2021 2022 2023
Revenue (M) $21,027 $22,871 $16,893 $30,057 $42,298 $35,968
Net Margins 12% 24% -3% 25% 26% 23%
Net Income (M) $2,591 $5,416 -$435 $7,664 $10,937 $8,233
Net Interest Expense (M) -$739 -$836 -$756 -$711 -$549 -$636
Depreciation & Amort. (M) $5,161 $5,546 $6,046 $5,724 $7,353 $6,413
Earnings Per Share $2.12 $4.54 -$0.37 $6.46 $9.52 $7.47
EPS Growth n/a 114.15% -108.15% 1845.95% 47.37% -21.53%
Free Cash Flow (M) $10,121 $8,829 $4,714 $14,478 $19,391 $12,353
Total Debt (M) $19,482 $18,591 $20,110 $13,694 $11,041 $9,819
Current Ratio 0.63 0.68 0.86 0.8 0.82 0.96

Canadian Natural Resources Shares Are Trading at a Discount:

Canadian Natural Resources has a trailing twelve month P/E ratio of 15.5, compared to an average of 14.36 for the Energy sector. Based on its EPS guidance of $6.85, the company has a forward P/E ratio of 11.2. According to the 18.2% compound average growth rate of Canadian Natural Resources's historical and projected earnings per share, the company's PEG ratio is 0.85. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 13.0%. On this basis, the company's PEG ratio is 1.19. This implies that the shares are fairly valued. Additionally, the market is possibly undervaluing Canadian Natural Resources in terms of its equity because its P/B ratio is 1.91 whereas the sector average is 2.1.

There's an Analyst Consensus of Some Upside Potential for Canadian Natural Resources:

The 9 analysts following Canadian Natural Resources have set target prices ranging from $71.8 to $92.18 per share, for an average of $83.41 with a buy rating. The company is trading -15.7% away from its average target price, indicating that there is an analyst consensus of some upside potential.

The largest shareholder is Capital World Investors, whose 13% stake in the company is worth $10,154,614,742.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.