Broker Revenue Forecasts For Canadian Natural Resources Limited (TSE:CNQ) Are Surging Higher

Celebrations may be in order for Canadian Natural Resources Limited (TSE:CNQ) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts have sharply increased their revenue numbers, with a view that Canadian Natural Resources will make substantially more sales than they'd previously expected.

Following the upgrade, the latest consensus from Canadian Natural Resources' nine analysts is for revenues of CA$38b in 2024, which would reflect a credible 5.6% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to surge 30% to CA$8.56. Prior to this update, the analysts had been forecasting revenues of CA$34b and earnings per share (EPS) of CA$8.16 in 2024. The most recent forecasts are noticeably more optimistic, with a decent improvement in revenue estimates and a lift to earnings per share as well.

See our latest analysis for Canadian Natural Resources

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of CA$99.05, suggesting that the forecast performance does not have a long term impact on the company's valuation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Canadian Natural Resources' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 4.4% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.6% annually. So it's pretty clear that, while Canadian Natural Resources' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for next year, expecting improving business conditions. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at Canadian Natural Resources.

Better yet, our automated discounted cash flow calculation (DCF) suggests Canadian Natural Resources could be moderately undervalued. You can learn more about our valuation methodology on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.