Analysts Have Made A Financial Statement On Canadian Natural Resources Limited's (TSE:CNQ) Annual Report
Investors in Canadian Natural Resources Limited (TSE:CNQ) had a good week, as its shares rose 9.8% to close at CA$97.70 following the release of its full-year results. The result was positive overall - although revenues of CA$36b were in line with what the analysts predicted, Canadian Natural Resources surprised by delivering a statutory profit of CA$7.47 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Canadian Natural Resources after the latest results.
View our latest analysis for Canadian Natural Resources
Following the recent earnings report, the consensus from six analysts covering Canadian Natural Resources is for revenues of CA$33.6b in 2024. This implies a small 6.5% decline in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 4.2% to CA$8.00. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$34.4b and earnings per share (EPS) of CA$7.67 in 2024. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.
There's been no real change to the average price target of CA$99.68, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Canadian Natural Resources, with the most bullish analyst valuing it at CA$110 and the most bearish at CA$86.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 6.5% annualised decline to the end of 2024. That is a notable change from historical growth of 17% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.1% per year. It's pretty clear that Canadian Natural Resources' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Canadian Natural Resources' earnings potential next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, long term profitability is more important for the value creation process. The consensus price target held steady at CA$99.68, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Canadian Natural Resources. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Canadian Natural Resources analysts - going out to 2026, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for Canadian Natural Resources you should be aware of.
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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.
