Reasons Canadian Natural Resources Limited (CNQ) Deserves a Closer Look

Analysts at Macquarie upped their rating on shares of Canadian Natural Resources Limited (NYSE:CNQ) from Neutral to Outperform in their opinion released on December 04. Macquarie analysts have downgraded their rating of CNQ stock from Outperform to Neutral in a separate flash note to investors on October 09.

Canadian Natural Resources Limited (CNQ) is expected to jump by 50 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $43.31-month high price target. This represents a whopping 59.46 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $34.74, which represents a return potential of 27.91 percent when compared to the closing price of the stock of $27.16 on Friday, January 11. The lowest price target for the stock is $25.39 — slightly more than -6.52 percent from CNQ’s current share price.

The shares are currently floating around the first support level of $26.63. Below this, the next support is placed in the zone of $26.09. Till the time, the CNQ stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 61.39 on daily chart, which may remain a cause for concern. If the price breaks below $26.09 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $27.52 mark may result into a pull-back move towards $27.88 level.

CNQ shares accumulated 0.25 points or 0.93 percent on Friday to $27.16 with a heavy trade volume of 4.651 million shares. After opening the session at $26.63, the shares went as high as $27.345 and as low as $26.45, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $32.4 billion and now has 1.19 billion shares outstanding. Canadian Natural Resources Limited (CNQ) stock has gained 4.5 percent of market value in 21 trading days.

CNQ stock has a trailing 3-year beta of 1.26, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $2.32 a share in the trailing twelve months. The stock’s value has surged 12.56 percent year to date (YTD) against a decline of -25.63 percent in 12 month’s time. The company’s shares still trade -28.9 percent away from its 1-year high of $38.20 and 24.3 percent up from 52-week low of $21.85. The average consensus rating on the company is 1.9, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

Shares of Canadian Natural Resources Limited (CNQ) are trading at a P/E ratio of 10.66 times earnings reported for the past 12 months. The industry CNQ operates in has an average P/E of 16.71. Its P/E ratio went as low as 9.89X and as high as 22.17 over the 5-year span. Further, it is sporting a 1.92 on the Price-to-Sales ratio. Compare this with the industry average P/S of 99.8. 51.7 percent is the gross profit margin for Canadian Natural Resources Limited and operating margin sits at 25.5 percent. Along with this, the net profit margin is 16.8 percent.

CNQ will be showing off its Q4 earnings on March 07. Analysts are forecasting revenue to climb 38.4 percent to $3.97B in the next fiscal quarter, while earnings are seen soaring by nearly 145 percent to $0.49 per share. History has shown that shares in Canadian Natural Resources Limited have gone up on 8 different earnings reaction days and are predicted to add 0.03 percent when the company reports upcoming earnings. In last reported earnings results, it earned $0.36 per share, better than the $0.28, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $5.9B, better than the $5.89B analysts expected. Earnings are estimated to increase by 86 percent this year, -21.48 percent next year and continue to increase by 3.78 percent annually for the next 5 years.