Canadian Natural Resources Posts C$1.38B 1Q Profit, Beats Estimates

Canadian Natural Resources (CNQ), one of the world’s independent crude oil and natural gas producers, swung back to profit in the first quarter of 2021. The improved performance was attributed to higher oil prices as a burgeoning global economic recovery boosted demand.

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Indeed, Canadian Natural Resources reported a profit of nearly C$1.38 billion (C$1.16 per share) in the first quarter compared to a loss of C$1.28 billion (C$1.08 per share) a year ago.

On an adjusted basis, CNQ made C$1.03 per share in the quarter ended March 31, while analysts on average expected earnings of C$0.84 per share, according to data from Refinitiv.

Revenue of C$6.61 billion also beat estimates of C$6.01 billion.

The company produced 1.25 million barrels of oil equivalent per day (bpd) in the first quarter of 2021, compared to 1.2 million bpd in the first quarter of 2020. The average realized crude price jumped nearly 30% to C$52.68 per barrel from the prior quarter.

Canadian Natural Resources’ President Tim Mckay said, “As the global vaccine distribution increases and crude oil demand recovers, especially in the United States, we are seeing improved commodity pricing, and when combined with our top tier execution and disciplined capital program we are well-positioned to generate significant free cash flow in 2021. Our first-quarter results were strong as we achieved record quarterly production of approximately 1,246 MBOE/d and record quarterly liquids production of over 979,000 bbl/d, as a result of our effective and efficient operations and high operating levels.”

The oil sands producer now expects to generate between C$5.7 billion and C$6.2 billion in free cash flow in 2021, up from an earlier forecast of C$4.9 billion to C$5.4 billion. (See Canadian Natural stock analysis on TipRanks)

Two weeks ago, Barclays analyst Christopher Tillett maintained a Buy rating on CNQ with a C$48.00 price target (22% upside potential).

Overall, CNQ scores a Strong Buy consensus rating among analysts based on 12 Buys and 1 Hold. The average analyst price target of C$47.55 implies a 20.7% upside potential to current levels. Shares have risen by more than 80% over one year.