WEBULL

A Look At Canadian Natural Resources (TSX:CNQ) Valuation After Venezuela Upheaval And Recent Analyst Downgrade

Simply Wall St · 6d ago

Canadian Natural Resources (TSX:CNQ) is back in focus after the ouster of Venezuelan President Nicolás Maduro. This shift could affect heavy oil trade flows and the competitive positioning of Canadian producers.

See our latest analysis for Canadian Natural Resources.

The Venezuelan news and the recent Evercore ISI downgrade have arrived during a weak patch for the stock, with a 7.47% year to date share price decline and a 2.24% dip in 1 year total shareholder return. This contrasts with a much stronger 3 and 5 year total shareholder record, which suggests long term momentum even as short term sentiment has cooled.

If you are reassessing energy exposure after these headlines, it can be useful to broaden your search and compare Canadian Natural Resources with fast growing stocks with high insider ownership.

With CNQ shares down 7.47% year to date and trading below the average analyst price target, investors may be weighing whether the recent pullback reflects fair concern about higher spending or whether the market is already pricing in future growth.

Most Popular Narrative: 17.7% Undervalued

With Canadian Natural Resources closing at CA$43.60 against a narrative fair value of about CA$52.95, the valuation gap centers on future cash generation and capital returns rather than recent share price weakness.

The ongoing incremental infrastructure buildout in Canada (e.g., TMX pipeline completion, LNG Canada ramp-up), combined with a strategic, diversified asset base, is set to improve market access and realized prices for CNQ's products, positively impacting revenue and long-term profitability.

Read the complete narrative.

Curious what sits behind that valuation gap? It hinges on modest revenue contraction, steady margins, and a higher earnings multiple than the wider oil and gas group. Want to see how those moving parts connect to the CA$52.95 fair value and a 6.12% discount rate?

Result: Fair Value of $52.95 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this narrative could be tested if oil sands costs rise faster than expected, or if tighter environmental rules and carbon pricing materially squeeze margins and cash flow.

Find out about the key risks to this Canadian Natural Resources narrative.

Build Your Own Canadian Natural Resources Narrative

If you see the story differently or simply prefer to test the numbers yourself, you can build your own view in minutes with Do it your way.

A great starting point for your Canadian Natural Resources research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

If CNQ has your attention, do not stop there. Spread your research across different themes so you are not relying on a single story or sector.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.