As Canadian Natural Resources Limited (TSE:CNQ) released its earnings announcement on 31 December 2018, it seems that analyst forecasts are fairly optimistic, with earnings expected to grow by 1.6% in the upcoming year against the past 5-year average growth rate of -1.8%. By 2020, we can expect Canadian Natural Resources’s bottom line to reach CA$2.6b, a jump from the current trailing-twelve-month of CA$2.6b. Below is a brief commentary around Canadian Natural Resources’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Can we expect Canadian Natural Resources to keep growing?
The 10 analysts covering CNQ view its longer term outlook with a positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of CNQ’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
From the current net income level of CA$2.6b and the final forecast of CA$4.4b by 2022, the annual rate of growth for CNQ’s earnings is 15%. EPS reaches CA$3.85 in the final year of forecast compared to the current CA$2.13 EPS today. In 2022, CNQ’s profit margin will have expanded from 12% to 20%.
Future outlook is only one aspect when you’re building an investment case for a stock. For Canadian Natural Resources, I’ve compiled three essential factors you should further examine:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is Canadian Natural Resources worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Canadian Natural Resources is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Canadian Natural Resources? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.