Canadian Natural Resources Valuation

Q: What is the Fair Price of CNQ when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

CNQ (CA$45.02) is trading below our estimate of [[fair value]] (CA$79.51)

Is CNQ undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Below Fair Value
Significantly Below Fair Value
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of CNQ when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: CNQ (CA$45.02) is trading below our estimate of fair value (CA$79.51)

Significantly Below Fair Value: CNQ is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for CNQ?

Key metric: As CNQ is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for CNQ. This is calculated by dividing CNQ's market cap by their current earnings.
What is CNQ's PE Ratio?
PE Ratio	12.5x
Earnings	CA$7.60b
Market Cap	CA$95.01b

CNQ key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	3x
Enterprise Value/EBITDA	6.5x
PEG Ratio	4x

Price to Earnings Ratio vs Peers

How does CNQ's PE Ratio compare to its peers?

The above table shows the PE ratio for CNQ vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	16.6x
TOU Tourmaline Oil	15.4x	25.7%	CA$23.8b
ARX ARC Resources	11.9x	13.9%	CA$15.0b
SCR Strathcona Resources	8.1x	-9.6%	CA$6.4b
PSK PrairieSky Royalty	30.9x	2.1%	CA$6.9b
CNQ Canadian Natural Resources	12.5x	3.1%	CA$95.0b

Price-To-Earnings vs Peers: CNQ is good value based on its Price-To-Earnings Ratio (12.5x) compared to the peer average (16.6x).

Price to Earnings Ratio vs Industry

How does CNQ's PE Ratio compare vs other companies in the CA Oil and Gas Industry?

7 Companies	Price / Earnings	Estimated Growth	Market Cap
HAM Highwood Asset Management	1.2x	-41.1%	US$59.76m
ALPS.U Alpine Summit Energy Partners	1x	n/a	US$24.02m
KUB.H Carcetti Capital	0.7x	n/a	US$5.82m
GCOM Green Shift Commodities	1.2x	n/a	US$3.87m

7 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: CNQ is expensive based on its Price-To-Earnings Ratio (12.5x) compared to the Canadian Oil and Gas industry average (10.5x).

Price to Earnings Ratio vs Fair Ratio

What is CNQ's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

CNQ PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	12.5x
Fair PE Ratio	15.8x

Price-To-Earnings vs Fair Ratio: CNQ is good value based on its Price-To-Earnings Ratio (12.5x) compared to the estimated Fair Price-To-Earnings Ratio (15.8x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst CNQ forecast and predictions for the stock price in 12 month’s time.
Date	Share Price	Average 1Y Price Target	Dispersion	High	Low	1Y Actual price	Analysts
Current	CA$45.02	CA$56.38 +25.2%	6.9%	CA$63.00	CA$50.00	n/a	20
Dec ’25	CA$47.52	CA$56.28 +18.4%	7.3%	CA$63.00	CA$48.00	n/a	20
Nov ’25	CA$47.28	CA$56.28 +19.0%	7.1%	CA$63.00	CA$48.00	n/a	20
Oct ’25	CA$46.92	CA$54.60 +16.4%	8.7%	CA$62.00	CA$44.00	n/a	20
Sep ’25	CA$48.78	CA$56.05 +14.9%	7.6%	CA$62.00	CA$48.00	n/a	20
Aug ’25	CA$48.48	CA$56.05 +15.6%	7.5%	CA$62.00	CA$47.00	n/a	20
Jul ’25	CA$48.73	CA$55.78 +14.5%	7.1%	CA$62.00	CA$47.00	n/a	20
Jun ’25	CA$52.35	CA$56.63 +8.2%	7.1%	CA$63.00	CA$47.00	n/a	20
May ’25	CA$51.51	CA$55.39 +7.5%	8.6%	CA$63.00	CA$45.50	n/a	21
Apr ’25	CA$52.35	CA$51.75 -1.1%	7.5%	CA$60.00	CA$45.00	n/a	21
Mar ’25	CA$48.85	CA$49.75 +1.8%	6.2%	CA$55.00	CA$43.00	n/a	22
Feb ’25	CA$42.24	CA$48.07 +13.8%	6.2%	CA$52.50	CA$43.00	n/a	22
Jan ’25	CA$43.41	CA$48.61 +12.0%	5.6%	CA$52.50	CA$43.00	n/a	22
Dec ’24	CA$45.82	CA$49.58 +8.2%	6.2%	CA$57.00	CA$45.00	CA$47.52	22
Nov ’24	CA$44.86	CA$48.93 +9.1%	6.3%	CA$56.00	CA$44.50	CA$47.28	21
Oct ’24	CA$43.92	CA$47.02 +7.1%	5.9%	CA$52.50	CA$43.00	CA$46.92	21
Sep ’24	CA$44.17	CA$45.86 +3.8%	4.6%	CA$50.00	CA$41.00	CA$48.78	21
Aug ’24	CA$40.45	CA$44.86 +10.9%	6.0%	CA$50.00	CA$40.00	CA$48.48	21
Jul ’24	CA$37.24	CA$44.75 +20.2%	6.6%	CA$50.00	CA$40.00	CA$48.73	20
Jun ’24	CA$36.91	CA$45.65 +23.7%	7.9%	CA$52.50	CA$40.00	CA$52.35	20
May ’24	CA$40.80	CA$45.95 +12.6%	8.3%	CA$55.00	CA$40.00	CA$51.51	21
Apr ’24	CA$37.40	CA$45.86 +22.6%	7.1%	CA$52.50	CA$40.00	CA$52.35	21
Mar ’24	CA$39.38	CA$46.26 +17.5%	9.5%	CA$59.00	CA$38.00	CA$48.85	21
Feb ’24	CA$39.35	CA$46.09 +17.1%	9.4%	CA$59.00	CA$38.00	CA$42.24	22
Jan ’24	CA$37.60	CA$46.36 +23.3%	8.6%	CA$59.00	CA$40.00	CA$43.41	21
Dec ’23	CA$40.17	CA$46.75 +16.4%	8.4%	CA$59.00	CA$40.00	CA$45.82	20

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.