Canadian Natural Resources (CNQ), one of the world’s independent crude oil and natural gas producers, reported a higher profit in the third quarter of 2021 due to higher output and a recovery in oil demand.
Canadian Natural reported a profit of C$2.20 billion (C$1.86 per diluted share) in the third quarter compared to a profit of C$408 million (C$0.35 per diluted share) a year ago.
On an adjusted basis, CNQ made C$1.77 per diluted share in the quarter ended September 30, up from C$0.11 per share in the prior-year quarter. Analysts on average expected earnings of C$1.58 per share, according to data from Refinitiv.
Daily production averaged 1,237,503 barrels of oil equivalent per day (bpd) in the third quarter of 2021, up from 1,111,286 bpd in the third quarter of 2020. Average realized crude price jumped nearly 70% to C$68.06 per barrel, while average realized natural gas price jumped nearly 80% to C$4.13.
Canadian Natural president Tim Mckay said, “Our diverse product mix is a competitive advantage, as we can allocate capital to the highest return projects, without being reliant on any one commodity. Our effective and efficient operations combined with disciplined capital allocation generates significant free cash flow, which delivers substantial shareholder returns through our sustainable dividend and ongoing share repurchases.”
Canadian Natural CFO Mark Stainthorpe said that the company remains on track to meet its 2021 capital investment target of around C$3.48 billion. The board of directors approved an increase of 25% of its quarterly dividend to C$0.5875 per share. (See Analysts’ Top Stocks on TipRanks)
Wall Street’s Take
On October 19, Goldman Sachs analyst Neil Mehta maintained a Buy rating on CNQ and set a C$51 price target. This implies 3% downside potential.
Overall, CNQ scores a Strong Buy consensus rating among analysts based on 12 Buys and three Holds. The average Canadian Natural Resources price target of C$56.38 implies 7.2% upside potential to current levels.
TipRanks’ Smart Score
TD scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock returns are very likely to beat the overall market.