Canadian Natural (CNQ) AI Stock Analysis

• Market Cap: $79.18B
• Dividend Yield: 5.49%
• Average Volume (3M): 20.53M
• Price to Earnings (P/E): 13.1
• Beta (1Y): 1.04
• Revenue Growth: -0.87%
• EPS Growth: -23.92%
• Country: CA
• Employees: 10,640
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.93
• Shares Outstanding: 2,099,250,200
• 10 Day Avg. Volume: 14,090,294
• 30 Day Avg. Volume: 20,526,112
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.24
• Price to Cash Flow (P/CF): 6.80
• P/FCF Ratio: 10.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $50.30
• Price Target Upside: 26.97% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

Canadian Natural Resources demonstrates strong financial performance and profitability, supported by strategic acquisitions and a robust dividend yield. The technical indicators suggest caution due to a potential downtrend, but corporate events like share buybacks and asset swaps bolster long-term prospects. Despite challenges in revenue growth and natural gas production, the company's operational efficiency and shareholder value initiatives provide a solid foundation.

Positive Factors

Financial Performance

Canadian Natural continues to deliver, providing another quarter of better-than-expected financial and operating performance.

Production

CNQ's Jackfish SAGD pad production is expected to come online, enhancing production volumes.

Negative Factors

Debt

The increase in debt due to the recent acquisition has led to changes in the free cash flow allocation policy.

Royalties

The price target for CNQ has been reduced due to rising royalties.

Canadian Natural Business Overview & Revenue Model

Company Description

Canadian Natural Resources Limited (CNQ) is one of the largest independent crude oil and natural gas producers in the world, headquartered in Calgary, Alberta, Canada. The company operates across several key sectors, including oil sands mining and upgrading, conventional light and heavy crude oil, bitumen, and natural gas. Canadian Natural is known for its diverse portfolio of assets and its commitment to sustainable operations, focusing on a balanced approach to resource development.

How the Company Makes Money

Canadian Natural makes money primarily through the exploration, development, and production of crude oil and natural gas. Its key revenue streams include the sale of these commodities in domestic and international markets. The company operates a diversified asset base with significant production from oil sands mining, thermal in situ production, and conventional oil and gas operations. Canadian Natural benefits from economies of scale, operational efficiency, and a flexible capital allocation strategy that allows it to optimize production and navigate market fluctuations. Additionally, the company engages in strategic partnerships and joint ventures, contributing to its earnings and providing opportunities for growth and development in the energy sector.

Canadian Natural Financial Statement Overview

Summary

Canadian Natural demonstrates strong profitability with a high gross profit margin and robust EBIT margin, indicating efficient operations. Despite a negative revenue growth rate, the balance sheet shows financial stability with a moderate debt level, and cash flows are healthy with strong cash generation relative to earnings.

Income Statement

Canadian Natural's income statement demonstrates strong profitability with a gross profit margin of 49.29% and a net profit margin of 17.12% for 2024. However, the revenue growth rate has been negative at -0.87% from 2023 to 2024, reflecting challenges in revenue expansion. The EBIT margin is robust at 47.13%, indicating efficient operational management. Overall, while profitability remains high, the company faces pressure on revenue growth.

Balance Sheet

The balance sheet shows a strong equity base with an equity ratio of 46.23% for 2024, signifying financial stability. The debt-to-equity ratio stands at 0.51, indicating a moderate level of leverage. Return on equity is solid at 15.47%, reflecting effective use of equity capital. However, the rise in total debt over the years requires careful monitoring.

Cash Flow

Cash flows are healthy with a free cash flow growth rate of 7.52% from 2023 to 2024. The operating cash flow to net income ratio is 2.19, demonstrating strong cash generation relative to earnings. The free cash flow to net income ratio is 1.31, indicating efficient cash management. Despite these strengths, the company should remain vigilant about capital expenditures impacting free cash flow.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
35.66B	35.97B	49.53B	32.85B	17.49B
	Gross Profit
17.58B	11.41B	16.26B	10.58B	69.00M
	EBIT
16.80B	10.46B	14.76B	9.51B	-445.00M
	EBITDA
16.27B	17.64B	22.01B	16.16B	6.13B
	Net Income Common Stockholders
6.11B	8.23B	10.94B	7.66B	-435.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
131.00M	1.40B	1.41B	1.05B	489.00M
	Total Assets
85.36B	75.95B	76.14B	76.67B	75.28B
	Total Debt
20.28B	12.35B	11.45B	14.69B	21.45B
	Net Debt
20.15B	11.48B	10.53B	13.95B	21.27B
	Total Liabilities
45.89B	36.12B	37.97B	39.72B	42.90B
	Stockholders Equity
39.47B	39.83B	38.17B	36.95B	32.38B
Cash Flow		Free Cash Flow
8.00B	7.44B	14.29B	9.99B	2.16B
	Operating Cash Flow
13.39B	12.35B	19.39B	14.48B	4.71B
	Investing Cash Flow
-14.10B	-4.86B	-4.99B	-3.70B	-2.82B
	Financing Cash Flow
-37.00M	-7.54B	-14.23B	-10.21B	-1.85B

Canadian Natural Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 39.62
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CNQ, the sentiment is Negative. The current price of 39.62 is below the 20-day moving average (MA) of 40.94, below the 50-day MA of 41.28, and below the 200-day MA of 44.58, indicating a bearish trend. The MACD of -0.96 indicates Positive momentum. The RSI at 46.82 is Neutral, neither overbought nor oversold. The STOCH value of 85.20 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CNQ.

Canadian Natural Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNQ	80 Outperform	$79.18B	13.13	15.47%	5.49%	-0.87%	-23.92%
SU	75 Outperform	$59.14B	10.12	13.82%	4.64%	3.25%	-25.69%
IMO	74 Outperform	$44.17B	9.61	21.08%	2.84%	1.08%	6.38%
TOU	73 Outperform	C$22.26B	16.80	8.55%	2.43%	-8.29%	-30.52%
ARX	71 Outperform	$16.13B	14.56	14.67%	2.60%	-9.83%	-27.76%
CVE	70 Outperform	$28.83B	9.42	10.88%	4.28%	3.97%	-22.22%
Sector *	55 Neutral	$6.97B	3.35	-6.10%	6.00%	-0.44%	-51.04%

Canadian Natural Corporate Events

Canadian Natural Resources Amends Stock Option Plan

Canadian Natural Resources Limited has amended its Stock Option Plan to require shareholder approval for any amendments to the plan’s provisions. This amendment aligns with Institutional Shareholder Services’ policies and will be voted on at the upcoming annual and special meeting of shareholders, potentially impacting shareholder engagement and governance practices.

Spark’s Take on TSE:CNQ Stock

According to Spark, TipRanks’ AI Analyst, TSE:CNQ is a Outperform.

Canadian Natural’s strong financial performance and attractive valuation, combined with positive technical indicators, contribute to a high overall score. Record production, strategic acquisitions, and shareholder returns are significant strengths, while challenges such as revenue growth and natural gas production stagnation are minor concerns.

To see Spark’s full report on TSE:CNQ stock, click here.

Canadian Natural Announces Share Repurchase Plan

Canadian Natural Resources Limited has announced a Normal Course Issuer Bid (NCIB) approved by the Toronto Stock Exchange, allowing the company to repurchase up to 178,738,237 shares over a 12-month period starting March 13, 2025. This move is part of Canadian Natural’s strategy to manage free cash flow allocation, with a focus on shareholder returns and maintaining a strong balance sheet. The company plans to implement an automatic share purchase plan to facilitate these repurchases, even during blackout periods, highlighting its commitment to enhancing shareholder value.

Canadian Natural Enhances Oil Sands Position with Shell Asset Swap

Canadian Natural Resources Limited has announced an asset swap with Shell Canada Limited, increasing its working interest in the Athabasca Oil Sands Project (AOSP) mines to 100% and boosting production by approximately 31,000 bbl/d. This move, which is expected to close by the end of Q1 2025 pending regulatory approval, strengthens Canadian Natural’s market position by enhancing its oil sands mining and upgrading operations. The swap will also see Canadian Natural holding an 80% working interest in the Scotford Upgrader and Quest facilities, aligning with its strategy to diversify sales and access global markets.

Canadian Natural Cautions Against TRC Capital’s Mini-Tender Offer

Canadian Natural Resources Limited has issued a warning to its shareholders regarding an unsolicited mini-tender offer by TRC Capital Investment Corporation to purchase 2.5 million of its shares at a price below market value. The company emphasizes that the offer is not recommended, highlighting the risks associated with such offers which lack investor protections and could lead to investors selling shares without understanding the actual market price. Canadian Natural advises shareholders to seek current market quotes and consult financial advisors, and suggests those who have tendered shares withdraw them before the deadline.