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Canadian Natural Resources (TSE:CNQ)
:CNQ

Canadian Natural (CNQ) AI Stock Analysis

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Canadian Natural

(NYSE:CNQ)

Rating:83Outperform
Price Target:
C$49.00
â–²(15.68%Upside)
Canadian Natural Resources scores well overall, driven by strong financial performance and positive earnings call highlights. The robust dividend yield and compelling valuation metrics further bolster the stock's attractiveness, offset by modest technical indicators that suggest stability rather than strong momentum.
Positive Factors
Debt Management
The company decreased its net debt by approximately $1.4 billion, which is seen positively by investors.
Dividend Yield
Valuation for CNQ is attractive, with the stock trading at a ~6% dividend yield.
Financial Performance
Canadian Natural Resources posted higher cash flow per share than expected due to increased production, strong realizations, and lower operating expenses.
Negative Factors
Macro Outlook
There is a more uncertain macro outlook with downside risk to commodity prices.
Royalties
The price target for CNQ has been reduced due to rising royalties.
Tariffs
There is uncertainty around tariffs, but CNQ management expects some costs to be absorbed by the US consumer.

Canadian Natural (CNQ) vs. iShares MSCI Canada ETF (EWC)

Canadian Natural Business Overview & Revenue Model

Company DescriptionCanadian 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 MoneyCanadian 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 Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: 6.38%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong overall performance with record production figures and significant cost efficiency achievements. Financial results were robust, with increased dividends and shareholder returns highlighting the company's solid financial health. However, some challenges were noted in specific production areas and market conditions, which require ongoing operational adjustments and monitoring.
Q1-2025 Updates
Positive Updates
Record Quarterly Production
Achieved record quarterly production of approximately 1.582 million BOEs per day, including a record quarterly liquids production of 1.174 million barrels per day and record natural gas production of 2.451 BCF per day.
Strong Oil Sands Performance
World-class oil sands mining and upgrading asset achieved record quarterly SCO production of approximately 595,000 barrels per day, a 34% increase compared to the first quarter of 2024.
Cost Efficiency Achievements
Industry-leading SCO operating costs of $21.88 per barrel, significantly lower than the peer average, resulting in an incremental annual margin of $1.2 billion to $1.7 billion.
Financial Strength and Shareholder Returns
Adjusted fund flow of approximately $4.5 billion and adjusted net earnings of $2.4 billion. Returns to shareholders were $1.7 billion, including $1.2 billion of dividends and $500 million of share repurchases.
Dividend Increase
Board approved a 4% increase to the quarterly dividend, marking the 25th consecutive year of dividend increases.
Negative Updates
Pelican Lake Production Decline
Pelican Lake production averaged just over 43,000 barrels per day, a decrease of 4% from the first quarter of 2024.
Operational and Production Challenges
Continuous improvement efforts required across the board, including workover opportunities at Kirby North and other operational adjustments.
Market and Pricing Challenges
Concerns around break-even costs and potential adjustments required in a lower price environment.
Company Guidance
During Canadian Natural's 2025 first quarter earnings call, the company delivered impressive operational and financial performance metrics. They achieved record quarterly production of approximately 1.582 million BOEs per day, with liquids production hitting 1.174 million barrels per day and natural gas production reaching 2.451 BCF per day. The oil sands mining and upgrading asset set a new record with synthetic crude oil (SCO) production at approximately 595,000 barrels per day, a 34% increase over the first quarter of 2024. This was supported by industry-leading SCO operating costs of $21.88 per barrel. The company reported adjusted fund flow of approximately $4.5 billion and adjusted net earnings of $2.4 billion, with returns to shareholders totaling $1.7 billion, including $1.2 billion in dividends and $500 million in share repurchases. The capital budget for 2025 was reduced by $100 million to $6.05 billion without impacting planned activities or production targets. Operating cost efficiencies were achieved across various assets, notably with a 14% improvement in drilling and completions costs for Duvernay wells. The company's debt-to-EBITDA ratio stood at one time, and liquidity remained strong at $5.1 billion. The Board approved a 4% dividend increase, marking the 25th consecutive year of dividend growth.

Canadian Natural Financial Statement Overview

Summary
Canadian Natural exhibits robust financial health with strong growth in both revenue and profit margins, supported by efficient operations and effective capital management. The balance sheet indicates a careful leverage strategy, though increasing debt levels warrant attention. Overall, the company shows a positive financial trajectory with strong returns for shareholders.
Income Statement
88
Very Positive
The company demonstrated strong revenue growth from the previous period with a TTM revenue of $40.12 billion, up from $35.66 billion annually. Gross and net profit margins are healthy at 29.6% and 18.9% respectively, indicating efficient cost management. EBIT and EBITDA margins of 28.1% and 44.3% further highlight operational efficiency.
Balance Sheet
75
Positive
A solid equity ratio of 47.7% suggests prudent financial management, though the debt-to-equity ratio of 0.43 indicates moderate leverage. The return on equity is robust at 18.7%, reflecting strong shareholder returns. However, the increase in total debt over the TTM period signals potential risk if not managed carefully.
Cash Flow
82
Very Positive
The operating cash flow to net income ratio of 1.95 suggests strong cash generation relative to profit. Free cash flow growth rate is impressive at 15.4%, indicating effective capital management. However, the cash reserves are relatively low, which could limit flexibility.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
40.12B35.66B35.97B49.53B32.85B17.49B
Gross Profit
11.89B10.51B11.41B16.26B10.58B69.00M
EBIT
11.26B9.73B10.46B14.76B9.51B-445.00M
EBITDA
17.77B16.27B17.64B22.01B16.16B6.13B
Net Income Common Stockholders
7.58B6.11B8.23B10.94B7.66B-435.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
93.00M131.00M1.40B1.41B1.05B489.00M
Total Assets
84.81B85.36B75.95B76.14B76.67B75.28B
Total Debt
17.43B20.28B12.35B11.45B14.69B21.45B
Net Debt
17.34B20.15B11.48B10.53B13.95B21.27B
Total Liabilities
44.37B45.89B36.12B37.97B39.72B42.90B
Stockholders Equity
40.45B39.47B39.83B38.17B36.95B32.38B
Cash FlowFree Cash Flow
9.23B8.00B7.44B14.29B9.99B2.16B
Operating Cash Flow
14.80B13.39B12.35B19.39B14.48B4.71B
Investing Cash Flow
-14.02B-14.10B-4.86B-4.99B-3.70B-2.82B
Financing Cash Flow
-1.46B-37.00M-7.54B-14.23B-10.21B-1.85B

Canadian Natural Technical Analysis

Technical Analysis Sentiment
Positive
Last Price42.36
Price Trends
50DMA
41.35
Positive
100DMA
41.97
Positive
200DMA
43.79
Negative
Market Momentum
MACD
0.33
Positive
RSI
51.65
Neutral
STOCH
56.95
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CNQ, the sentiment is Positive. The current price of 42.36 is below the 20-day moving average (MA) of 42.82, above the 50-day MA of 41.35, and below the 200-day MA of 43.79, indicating a neutral trend. The MACD of 0.33 indicates Positive momentum. The RSI at 51.65 is Neutral, neither overbought nor oversold. The STOCH value of 56.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CNQ.

Canadian Natural Peers Comparison

Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSCNQ
83
Outperform
C$88.67B11.8218.99%5.10%7.78%4.75%
TSWCP
76
Outperform
$10.64B5.6216.40%8.26%5.56%35.85%
TSARX
75
Outperform
C$17.06B12.8217.25%2.43%2.20%13.50%
TSMEG
73
Outperform
$6.45B10.7513.64%1.17%-10.66%13.34%
TSTOU
73
Outperform
C$23.57B18.638.35%2.42%-8.29%-30.52%
TSPSK
65
Neutral
$5.43B24.088.39%4.33%1.73%3.68%
57
Neutral
$7.16B3.10-4.49%5.66%0.82%-49.15%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:CNQ
Canadian Natural
43.25
-2.80
-6.07%
TSE:MEG
MEG Energy
25.41
-2.55
-9.13%
TSE:PSK
PrairieSky Royalty
23.04
-1.96
-7.83%
TSE:ARX
ARC Resources
29.58
5.25
21.57%
TSE:WCP
Whitecap Resources
8.69
-0.68
-7.26%
TSE:TOU
Tourmaline Oil
63.97
0.69
1.09%

Canadian Natural Corporate Events

Shareholder MeetingsBusiness Operations and Strategy
Canadian Natural Reports Strong Shareholder Support at Annual Meeting
Positive
May 9, 2025

Canadian Natural Resources Limited held its Annual and Special Meeting of Shareholders, where key resolutions were voted on, including the election of directors, appointment of auditors, and approval of the employee stock option plan and executive compensation approach. The results reflect strong shareholder support for the company’s leadership and strategic initiatives, indicating a stable outlook for its governance and operational strategies.

Business Operations and StrategyFinancial Disclosures
Canadian Natural Reports Record Q1 2025 Production and Financial Gains
Positive
May 8, 2025

Canadian Natural Resources Limited reported record production levels in the first quarter of 2025, achieving approximately 1,582,000 BOE/d, with significant contributions from both liquids and natural gas. The company also announced a reduction in its 2025 capital budget by $100 million without impacting its planned operations, highlighting its focus on cost efficiencies and shareholder value. Financially, the company achieved strong results with adjusted net earnings of $2.4 billion and returned $1.7 billion to shareholders. The company continues to strengthen its balance sheet and maintain a robust business model with a low breakeven point, ensuring sustainable operations and competitive advantages.

Dividends
Canadian Natural Resources Declares Increased Quarterly Dividend
Positive
May 8, 2025

Canadian Natural Resources Limited has announced a quarterly cash dividend of C$0.5875 per common share, payable on July 3, 2025, to shareholders of record as of June 13, 2025. This marks the 25th consecutive year of dividend increases, reflecting the company’s confidence in its sustainable business model, strong balance sheet, and robust asset base.

Shareholder MeetingsBusiness Operations and Strategy
Canadian Natural Resources Amends Stock Option Plan
Neutral
Apr 15, 2025

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.

Stock BuybackBusiness Operations and Strategy
Canadian Natural Announces Share Repurchase Plan
Positive
Mar 11, 2025

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.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.