Robinhood shares gain on Q2 beat, as user and crypto growth accelerate
On Friday, Evercore ISI analyst Stephen Richardson raised the rating for Canadian Natural Resources Limited (TSX:CNQ:CN) (NYSE: CNQ) from In Line to Outperform, while maintaining the price target at Cdn$58.00. Richardson cited the company’s consistent management approach and diversified portfolio as key strengths. Trading at a P/E ratio of 11.23x and offering a substantial 5.67% dividend yield, InvestingPro analysis suggests the stock is currently undervalued. Despite an 11% lag in the company’s shares year-to-date relative to the MSCI Energy Index, the analyst sees this as an unwarranted underperformance.
Richardson pointed out that concerns over Canadian Natural Resources’ fourth-quarter acquisition, which led to a rise in net debt above the target range, have tempered expectations for near-term buybacks. According to InvestingPro data, the company maintains a moderate debt level with a healthy debt-to-equity ratio of 0.29, while achieving an overall Financial Health score of "GOOD." Additionally, the uncertainty surrounding potential tariffs has influenced the stock’s performance. However, Richardson believes that historically, post-acquisition periods have offered good opportunities to invest in the company, especially as recent deals are expected to be highly accretive.
Evercore ISI’s analysis suggests that Canadian Natural Resources could reach its C$15 billion debt target by early 2028, with 75% of free cash flow potentially returning to shareholders. The firm forecasts a 13% free cash flow yield for the company based on their commodity outlook, with a projected 9.2% shareholder yield for 2025.
Regarding the political landscape, Richardson acknowledged that the proposed 10% tariffs on Canadian energy imports could impact the company, but he believes this is already factored into Evercore ISI’s estimates. The firm assumes a C$18 per barrel Western Canadian Select-West Texas Intermediate differential for 2026/27. Moreover, Canadian Natural Resources has multiple options for oil and gas egress to mitigate reliance on U.S. markets.
The analyst concluded by emphasizing the resilience of Canadian Natural Resources, noting its low-decline, long-duration oil assets that are competitive on a global scale in terms of costs and emissions. With an impressive track record of 24 consecutive years of dividend payments and strong free cash flow of $7.18 billion in the last twelve months, the company demonstrates robust financial performance. Richardson expressed confidence in the company’s management, which has shown a blend of short-term pragmatism and long-term strategic planning. For deeper insights into CNQ’s valuation and growth prospects, access the comprehensive Pro Research Report available on InvestingPro, which provides detailed analysis of this and 1,400+ other top stocks.
In other recent news, Canadian Natural Resources Limited (CNQ) reported strong financial and operational results for the fourth quarter of 2024. The company achieved record production levels, with over one million barrels of liquids produced daily, and reported an annual adjusted funds flow of $14.9 billion. The fourth quarter alone saw an adjusted funds flow of $4.2 billion, showcasing the company’s robust financial performance. Canadian Natural Resources also completed a capital program under budget by approximately $100 million, further enhancing its financial position. The company returned approximately $7.1 billion to shareholders throughout the year, reflecting its commitment to shareholder returns.
Additionally, Canadian Natural Resources has plans to expand its Jack Pine mine, potentially increasing production by 100,000 barrels per day. The company is exploring further debottlenecking opportunities and remains focused on maintaining a flexible capital allocation strategy. Analyst firms like RBC Capital Markets and CIBC (TSX:CM) have noted the company’s strong operational efficiency and growth potential. The acquisition of Chevron (NYSE:CVX)’s assets in the Duvernay region was completed in December 2024, adding significant reserves and production capacity. These developments indicate Canadian Natural Resources’ strategic focus on long-term growth and value creation for its shareholders.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.