Canadian Natural Resources Limited Just Missed EPS By 36%: Here's What Analysts Think Will Happen Next

Last week, you might have seen that Canadian Natural Resources Limited (TSE:CNQ) released its quarterly result to the market. The early response was not positive, with shares down 4.1% to CA$102 in the past week. Statutory earnings per share fell badly short of expectations, coming in at CA$0.91, some 36% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at CA$8.2b. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Canadian Natural Resources

Taking into account the latest results, Canadian Natural Resources' six analysts currently expect revenues in 2024 to be CA$35.1b, approximately in line with the last 12 months. Per-share earnings are expected to climb 11% to CA$7.70. In the lead-up to this report, the analysts had been modelling revenues of CA$35.0b and earnings per share (EPS) of CA$7.59 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at CA$112. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Canadian Natural Resources analyst has a price target of CA$126 per share, while the most pessimistic values it at CA$91.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 1.8% by the end of 2024. This indicates a significant reduction from annual 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 5.7% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Canadian Natural Resources is expected to lag the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Canadian Natural Resources going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Canadian Natural Resources that we have uncovered.

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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.